Indonesian Islamic Organization Issues Fatwa Against Cryptocurrency

[ASEAN NOW Content Team]

 

Cryptocurrency has been labelled "haram," or outlawed under Islamic law, by a provincial affiliate of one of Indonesia's largest Islamic organisations.
The decision was reached following a "heated discussion" in which a crypto specialist was called to explain the process of using digital money in greater detail.

Cryptocurrency Deemed ‘Haram’ in Indonesia

A fatwa regarding the status of cryptocurrencies under Islamic law was recently published by the East Java division of the Indonesian religious organisation Nahdlatul Ulama.
Digital currencies secured by encryption and utilised as a transaction tool are to be regarded "haram," or banned, according to the nonbinding judgement.

According to the Indonesian news portal Tempo, the decision occurred as a consequence of the organization's "bahtsul masail," a debate held on Sunday, Oct. 24.
Members of the debate, which was described as "dynamic" and "hot" in the article, came to the conclusion that the usage of cryptocurrencies might jeopardise the legitimacy of financial transactions.

 

Another topic brought up during the conference was that cryptocurrency may be used to conduct fraud.
Kiai Azizi Chasbullah, the "discussion's certifier," according to an announcement on the East Java Nahdlatul Ulama branch's website:

 

Despite the fact that crypto has previously been recognised by the government as a commodity, participants at the bahtsul masail came to the conclusion that it cannot be legalised under the [Islamic sharia].

 

They also agreed that "cryptocurrency lacks any utility from the sharia point of view, as mentioned in fiqh," or Islamic jurisprudence, during the discussion.
According to the Indonesian magazine, a "cryptocurrency specialist" who took part in the religious debate to explain "the right practise in the use of digital currency" verified this position.

 

The fatwa issued by the Islamic organisation comes after the Indonesian government recently stated that it does not intend to implement a broad ban on cryptocurrency.
Speaking to local media, the country's Minister of Trade Muhammad Luthfi stressed that the executive power will not follow China's lead, which repeated a ban on all crypto transactions and initiated a crackdown on bitcoin mining and trade earlier this year.

 

In Indonesia, which boasts the world's largest Muslim population, cryptocurrencies are becoming increasingly popular.
The number of crypto transactions has increased by 40% in the first five months of 2021, according to statistics from the 13 local exchanges recognised by the country's Futures Exchange Supervisory Board.
The overall volume was 65 trillion rupiah ($4.5 billion) last year.