Monday, November 29, 2021

Indonesia’s Islamic Authority Declares Cryptocurrency Haram, Forbidden for Muslims – Regulation Bitcoin News

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Indonesia’s top Islamic body, the country’s authority on Shariah compliance, has reportedly declared cryptocurrency haram, forbidden for Muslims under Islamic law. The Indonesian Ulema Council explained that crypto has elements of uncertainty, wagering, and harm.

Cryptocurrency Is Forbidden for Muslims Under Islamic Law in Indonesia

Indonesia’s Ulema Council (Majelis Ulama Indonesia or MUI), the country’s top Islamic body that holds the authority on Shariah compliance, has reportedly declared the use of crypto as a currency haram, forbidden under Islamic law for Muslims.

Asrorun Niam Sholeh, head of religious decrees, explained Thursday after the council held an expert hearing that cryptocurrency has elements of “uncertainty, wagering, and harm,” Bloomberg reported.

However, he noted that if crypto can abide by Shariah tenets and can show a clear benefit, then it can be traded as a digital asset or a commodity.

Indonesia, the country with the largest Muslim population, has an estimated 231 million Muslims, which is 86.7% of the country’s population.

The Ulema Council advises the country’s finance ministry and central bank on Islamic finance issues. It comprises many Indonesian Muslim groups including Nahdlatul Ulama (NU), Muhammadiyah, and smaller groups such as Syarikat Islam, Perti, Al Washliyah, Mathla’ul Anwar, GUPPI, PTDI, DMI, and Al Ittihadiyyah.

The MUI decree is not legally binding and does not mean cryptocurrency is banned in Indonesia. However, it could deter Muslims from investing and local institutions from issuing or providing services in crypto assets.

In October, a provincial branch of one of the largest Islamic organizations in Indonesia, Nahdlatul Ulama, similarly declared cryptocurrency haram under religious law.

However, the Indonesian government has indicated that the country will not impose an outright ban on cryptocurrency as China did. Crypto assets are allowed to trade alongside commodity futures in Indonesia but cannot be used as a currency. Meanwhile, the government is pushing to set up a crypto exchange by the end of the year and Bank Indonesia has been exploring a central bank digital currency (CBDC).

What do you think about Indonesia’s Ulema Council declaring cryptocurrency haram for Muslims? Let us know in the comments section below.

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