Bitcoin and cryptocurrencies are intriguing because they are very different from the traditional financial systems we use today. One particular subject people have pondered is whether or not bitcoin complies with the religious law that forms a part of Islamic tradition — otherwise known as Shariah Law. This week a microfinance firm based in Indonesia, Blossom Finance, published a 22-page working paper that concludes that “bitcoin qualifies as Islamic money, except where it is banned by a local government.”
Also read: Bitgrail’s $170M Hack Continues to Provide Drama
Is Bitcoin Halal or Haram?
Over the past few years since the creation of bitcoin, many people have wondered if cryptocurrencies are compatible with Shariah-compliant finance. Islamic banking has a lot more rules that apply to profit sharing, loss bearing, leasing, safekeeping, and more. For instance, Shariah Law specifically prohibits usury which is called “riba” or collecting interest paid on loans. Bitcoin and cryptocurrencies have come into question over the years concerning whether or not they comply with Islamic banking. Just recently this past December a Muslim cleric declared that owning bitcoin was compatible with Islamic finance. However other clerics have disagreed with this opinion and Egypt’s top Islamic cleric had issued a fatawa (religious edict) against bitcoin.
Is Bitcoin Halal or Haram?
Blossom Publishes a 22-Page Study on Bitcoin and Islamic Finance
This week news.Bitcoin.com spoke with Matthew J. Martin, the founder of the startup Blossom Finance that uses cryptocurrency to help Muslims with Islamic financial law. Martin and Blossom’s internal Shariah advisor and Shariah compliance officer, Mufti Muhammad Abu Bakar, published a study that concludes bitcoin does qualify as Islamic money, unless a local government forbids the use of digital
