Cypto Currency- The shariah aspect

Crypto Currency Insurance

The advent of crypto currencies has opened up a new avenue in the digital currency space. While many experts claim that it is the technology of the future, but for discerning Muslims a more fundamental question arises, as to whether this new technology is in congruence with sharia guidelines and principles.

Several Islamic scholars and Islamic institutions have tried to provide rulings (fatwa) based on their understanding of the crypto currencies, its features and the complex technology behind it.

The opinions range from outright haram to makrooh and being permissible with each scholar providing their justification with regards to their opinion.

In this article we will try and understand the reasons for the opinions of the scholars.

Views of some prominent Islamic scholars/Islamic institution on cryptocurrencies.


Mufti Taqi Usmani , Vice-President  and Shaikhul – Hadith , Jamia Darul  Uloom, Karachi

“……., as per fiqh , there’s no sound ground devised till yet to grant its permissibility.”  Click here to read the full text.


Darul Uloom Deoband

Trading of cryptocurrencies has not been considered shariah compliant.

Please click here to read the fatwa.


Datuk Dr Mohd Daud Bakar (Chairman Securities Commission Malaysia (SC) Shariah Advisory Council , Malaysia)

 “ Bakar explained that cryptocurrency is not regarded as legal tender, but it is a legit commodity that can be exchanged within the market, as long as it is not backed by “ribawi items,” like gold and silver, the Malaysian Reserve reported.

To read the full article click here.


Shariah Advisory Council of the Securities Commission Malaysia.

Digital currency is recognized as mal from Shariah perspective. Trading in such coins , however is subject to certain conditions. Please read the full report here.



No clear view as of now and have advised people to be careful about investing or using these currencies.

You can read the full Q&A with the Secretary-General of AAOIFI (Part 2/2)  here.


Fiqh Council of North America

Allowed Bitcoin specifically not for crypto currencies in specific.

Read the fatwa here.


The Grand Mufti of Egypt – Shaykh Shawki Allam

Not considered halal Read the article here


The National Ulema Council (MUI), Indonesia

Cryptocurrency as a currency is haram, however it could be traded as a commodity or digital assets if they meet sharia requirements.

Read the full article here.


Criticisms of Crypto Currency

The scholars who have considered crypto as haram have mainly given the following reasons:

  • Crypto currencies are not backed by any government and are not considered as legal tender.
  • Crypto currencies are highly speculative and volatile, hence presence of gharar makes it haram.
  • The issuer of these currencies are not known.
  • It does not have any intrinsic value of its own.
  • Since its lacks any government control it can be used for illegal purposes.

Agruments in favour

  • On the other hand scholars have who have considered Crypto as halal have based their opinion on the maxim, everything is permissible unless it is found to be clearly contradictory to the Shariah principles.
  • Although Crypto Currencies are mostly not backed by government, but that in itself cannot be a reason to not consider it haram, as it has the features of mal and can be used for trade as such.
  • Crypto currencies are highly speculative and hence extreme caution needs to be exercised while dealing with such assets. Moreover, not all crypto have been considered halal. The purpose and the underlying asset make its usage halal or haram.
  • With respect to the value argument, scholars justify that its value is derived from the fact that people treat it as something of value and it is excepted as medium of exchange a substantial no of people.
  • Government control is not the criteria for the sharia compliance as the other kinds of currencies with government control are used for illegal activities as well.


After reviewing the opinions of several scholars, the opinion of scholars who allow the use seems more logical. However, scholars who have allowed the use of crypto have added certain caveats and conditions. So one should review and analyse the opinions of the prominent scholars and make an informed choice and decision.

Not all crypto currencies are halal, its permissibility will depend upon its purpose, usage environment and the under lying asset.

Moreover, the nature of the asset being highly volatile, it is not for everyone.

A lot of frauds are being floated in the market in the name of crypto assets.

This is an extremely risky and volatile asset class and extreme care and caution needs to be exercised while making any decision. An investment should always be made only in assets which one understands. 

Remember, rizq is in Allah’s hand and whatever is destined for us will come to us, our intention should always be to earn the halal way and not become too greedy and indulge in things which are either too risky or there exists too much ambiguity.

May Allah guide us all to the right path and protect us from the wrong. Ameen.


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