Is Cryptocurrency halal to invest?

Discussion in 'Smalltalk' started by Khanah, Jan 18, 2024.

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  1. Khanah

    Khanah Veteran

  2. Ashari Matuiridi

    Ashari Matuiridi New Member

    Man,

    Where I live cash is pretty much being phased out and all that remains is the digital currency, which is almost no different to 'crypto' without the bank being the custodian.

    Oo, and the hassle of withdrawing your whole bank account in cash... And depositing...
    Always being accused of money laundering in the process...

    Almost certain that the fatwas will be revised and revisited in a few years as crypto becomes more mainstream & stable and cash disappearing in favor of digital currency.

    Unless someone comes along and says digital currency loses its status as a commodity somehow since the ''physical aspect' is lost.
     
  3. shahnawazgm

    shahnawazgm Veteran

    Regarding bank notes Ala Hazrat had his fatwa for its validity in the lines of it being a commodity so it doesn't matter how much value is put to it.

    However in today's time irrespective of cryptocurrency we are only dealing with a digital currency that is simply a figure stored in the computer system of a bank. As we know the banks hardly back it up with physical assets, and for the banks to steal your money (sanctions?) they simply freeze this digital account.

    So my question is how different is todays prevalent banking to cryptocurrency which in today's world might even be more sanction proof than your bank account?

    I don't have the answer as I'm not a mufti. Just some things to ponder upon.
     
    Ashari Matuiridi likes this.
  4. Noori

    Noori Senior Moderator

    well, ulama don't permit it yet, crypto does not fulfill the requirements to be considered as goods/commodity that can be traded.
     
  5. IslamIsTheTruth

    IslamIsTheTruth Well-Known Member

    So here we are 5 to 6 years later. Anyone who bought back then would be rich now. Has the narrative changed? What do we say about the permissibility of crypto today?
     
  6. Ashari Matuiridi

    Ashari Matuiridi New Member

    I have wondered about this too...

    Could someone well versed share their opinions about this?

    Is it really that problematic to store some of ones money in crypto currency as opposed to a normal bank? The value of it fluctuates anyway since the latter is a fiat currency...
     
  7. AbdalQadir

    AbdalQadir time to move along! will check pm's.

  8. Sunni User

    Sunni User New Member

    Salaam

    Are there any recent fatwas from sunni ulama now that crypto is being accepted by companies such as paypal to make payments from

    Thanks
     
  9. Juwayni

    Juwayni Veteran

    Why are ribawi financial orgs who many consider "authorities" such as securities exchange commissions and the like are taken by some as sources dictating the legitimacy or lack thereof for cryptos? These are the same organizations that allowed and continue to allow the convoluted gharar and riba ridden speculatory systems that led to the 2008 crash.

    Looking at the GameStop short, these guys and their cronies prefer a group of gamblers in suits preying on businesses and they don't mind it. Whereas when a group of laypeople pull a short squeeze they erupt into a frenzy calling it unfair. Every. Single. One. of these ribawi "financial authorities" is guilty of pushing forth this predatory system. One set of rules for the rich. Another set of rules for the rest.

    In the west there isn't a "law of the land". There are rules for the rich and separate rules from the laiety.

    If anything, these guys being afraid of cryptos and their inability to control it indicates its potential as an equalizing force. How many paper rupies go into mafia and drugs? Do people lose their money to scams like the lottery or telemarketers? Yes. These problems are not crypto exclusive.

    The biggest difference between cryptos and paper money is that a bank has a central ledger of transactions and could theoretically bleed you dry because they say your balance is now zero (and hey, they invest your money as soon as it goes in). Blockchain logs all the transactions on the network and everyone can theoretically have a copy. In order to rewrite the ledger you'd need to takeover a significant majority of the network. In addition, the very software that regulates the rules of the network is open sourced. You can read the rules yourself. How many here can honestly tell me you know exactly what policy a bank actually operates on rather than the one they show the public?

    In essence you have digital scarcity in the form of a token generated by cryptographic work + distributed record keeping + open source software. With cryptos like ethereum you also have smart contracts too.

    If anyone here's been following the whole Parler fiasco, you can see full well who the shot callers are. They will deplatform you and demonetize you. Then what? Even Visa and MasterCard will blacklist people they don't like.
     
    Ashari Matuiridi likes this.
  10. Unbeknown

    Unbeknown Senior Moderator

  11. Unbeknown

    Unbeknown Senior Moderator

  12. ridawi

    ridawi Muhammadi Sunni Hanafi

    I forgot to attach the detailed research on bitcoin and virtual currencies that serves as a basis for the seminar discussions.
     

    Attached Files:

    Unbeknown likes this.
  13. ridawi

    ridawi Muhammadi Sunni Hanafi

    We now have an official reply regarding cryptocurrencies from a panel of senior muftis. I have attached the original decision in urdu.

    A summary in English:

    Virtual currencies (like bitcoin) have no tangible or external existence and as such it cannot be considered property [maal] as per the shari’ah. If it is not maal then it cannot be a currency either. Therefore, as it is not maal, it is not permissible to buy and sell virtual currencies.

    Decision by Shar'i Council of India, Bareilly Sharif presided over by Sayyidi Taj al-Shari'ah Mufti Akhtar Raza (hafizahullahu ta'ala).
     

    Attached Files:

    Unbeknown likes this.
  14. ridawi

    ridawi Muhammadi Sunni Hanafi

  15. abu nibras

    abu nibras Staff Member

    Unbeknown likes this.
  16. abu Hasan

    abu Hasan Administrator

  17. Aqib alQadri

    Aqib alQadri Veteran

    The bitcoin really "bit" some guys today.
     
    Unbeknown likes this.
  18. abu Hasan

    abu Hasan Administrator

    btw,

    on feb 5th 2018, that is today bitcoin is in free fall and dips below $7K

    a while ago charts were showing 1BTC = US$6882

    upload_2018-2-5_23-3-5.png
     
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  19. ghulam-e-raza

    ghulam-e-raza Well-Known Member

    Bitcoin is P2P, there's no "server" which becomes "kharab" (the whole point of bitcoin is that it is decentralised). Maybe he's talking about online exchanges but that's a completely different issue altogether.
     
    Unbeknown likes this.
  20. abu Hasan

    abu Hasan Administrator

    i happened to watch nizamuddin sab's speech just a while ago.

    it appears that he does not understand bitcoin, going by that speech. the premises he cites, based on which he rules on bitcoin indicates that he is mixing ponzi schemes with crypto-currencies; while it may be true in a sense.

    also mufti sab's explanation of fiat currency is oversimplified. he seems to have given the great indian "notebandi" a big leeway and discount the risks.

    ---
    his talking of 'server kharab ho jaye' is factually incorrect.(update: a brother pointed out that we must cut slack for non-specialists for their incorrect terminology. true, but we are talking of bitcoin aren't we?).

    his understanding of "hukumat wali currency" which is fiat currency also raises questions on its durability.

    ---
    i am not saying bitcoin is halal or permissible, but just pointing out things that i know are patently wrong.
     
    Last edited: Feb 4, 2018
    Abdul Majid Ansari and Unbeknown like this.

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