ridawi
Muhammadi Sunni Hanafi
It is first important to examine the nature of bitcoin and more generally cryptocurrencies before a ruling can be passed on its permissiblility or impermissibility.
Is it maal (property, goods)? If so, which of the four types of maal is it?
This is an important question because if it is not maal then trading it is baatil (void). The second question (which of the four types it falls under) is important as the answer to that question will determine the conditions for its trade.
Maal, according to the shariah, means:
- that which human instinct inclines towards;
- that which is given and taken [as gifts etc] and that which one prohibits/prevents others from using as it is owned by him.
- that which is hoarded for the time of need (ie saved and stored to be spent/used/benefitted from when the need arises).
[These definitions have been gleaned from various major hanafi books like radd al-muhtar, bahr al-rayiq, fath al-qadir etc]
As of recent, it’s clear that people desire purchasing and storing bitcoin and other cryptocurrencies. People store them in online wallets and can transfer them to whom ever they want. People prevent others from being able to use their cryptocurrencies as the wallets are password protected and have private keys only accessible to the owner of the wallet. People are storing them and plan to sell them when the price increases. It appears, therefore, that cryptocurrencies satisfy the general criteria for something to be maal.
Four types of maal:
1. That which is always thaman (monetary payment) regardless of anything. Eg gold and silver (these are thaman e khalqi - as in created to be forms of payment).
2. That which is always mabi’ (object of transaction ie the item being sold in exchange for a price). Eg clothes etc.
3. That which has an intrinsic attribute because of which it can be thaman in some cases and mabi’ in others. Eg someone sells an item of clothing in return for 1kg of wheat. Wheat is generally not a form of payment but here the seller considers it as such. So wheat, though generally mabi’, became thaman as a result of the agreement.
4. That which is in essence a commodity but by convention/custom it is considered thaman. Eg fiat currency (notes, coins etc). For as long as it remains in circulation, it will be considered thaman, otherwise it will return to its original commodity state (eg for paper notes, if they lose all value, they return to their basic state of just paper).
Cryptocurrencies may fall under category 3 or 4.
In terms of category 3: they can be thaman at times, ie when you use one cryptocurrency to buy another cryptocurrency and it can be mabi’ at times, ie when it is being purchased using fiat currency (buying one crypto coin for £10 for example).
In terms of category 4: it can only fall into such a category when the public accept it to be a form of payment. At the moment, this is not the case. Even if it became widely used as a form of payment, if/when it loses its value, what basic ‘commodity’ [sil’ah] will it revert back to?
Requirement of taqwim
Being maal itself is not sufficient for its permissibility. Otherwise, strictly speaking, alcohol is a form of maal as it satisfies the above criteria but despite that it is still haram to trade alcohol. As a result, there is an additional requirement that the maal must be mutaqawwim, which means that to derive benefit from it must be permissible according to the shariah (ie it has value according to the shariah. Pig, alcohol etc are not permissible to derive benefit from and thus trading them is haram - they are ghayr mutaqawwim).
With regards to cryptocurrencies, there doesn’t seem to be any factor indicating it to be haram so it appears to be mutaqawwim too.
There are also other questions about the way it is traded that may influence its permissibility and impermissibility. The fact that it is not tangible but only virtual ought to be considered too. Some other time in sha Allah.
Is it maal (property, goods)? If so, which of the four types of maal is it?
This is an important question because if it is not maal then trading it is baatil (void). The second question (which of the four types it falls under) is important as the answer to that question will determine the conditions for its trade.
Maal, according to the shariah, means:
- that which human instinct inclines towards;
- that which is given and taken [as gifts etc] and that which one prohibits/prevents others from using as it is owned by him.
- that which is hoarded for the time of need (ie saved and stored to be spent/used/benefitted from when the need arises).
[These definitions have been gleaned from various major hanafi books like radd al-muhtar, bahr al-rayiq, fath al-qadir etc]
As of recent, it’s clear that people desire purchasing and storing bitcoin and other cryptocurrencies. People store them in online wallets and can transfer them to whom ever they want. People prevent others from being able to use their cryptocurrencies as the wallets are password protected and have private keys only accessible to the owner of the wallet. People are storing them and plan to sell them when the price increases. It appears, therefore, that cryptocurrencies satisfy the general criteria for something to be maal.
Four types of maal:
1. That which is always thaman (monetary payment) regardless of anything. Eg gold and silver (these are thaman e khalqi - as in created to be forms of payment).
2. That which is always mabi’ (object of transaction ie the item being sold in exchange for a price). Eg clothes etc.
3. That which has an intrinsic attribute because of which it can be thaman in some cases and mabi’ in others. Eg someone sells an item of clothing in return for 1kg of wheat. Wheat is generally not a form of payment but here the seller considers it as such. So wheat, though generally mabi’, became thaman as a result of the agreement.
4. That which is in essence a commodity but by convention/custom it is considered thaman. Eg fiat currency (notes, coins etc). For as long as it remains in circulation, it will be considered thaman, otherwise it will return to its original commodity state (eg for paper notes, if they lose all value, they return to their basic state of just paper).
Cryptocurrencies may fall under category 3 or 4.
In terms of category 3: they can be thaman at times, ie when you use one cryptocurrency to buy another cryptocurrency and it can be mabi’ at times, ie when it is being purchased using fiat currency (buying one crypto coin for £10 for example).
In terms of category 4: it can only fall into such a category when the public accept it to be a form of payment. At the moment, this is not the case. Even if it became widely used as a form of payment, if/when it loses its value, what basic ‘commodity’ [sil’ah] will it revert back to?
Requirement of taqwim
Being maal itself is not sufficient for its permissibility. Otherwise, strictly speaking, alcohol is a form of maal as it satisfies the above criteria but despite that it is still haram to trade alcohol. As a result, there is an additional requirement that the maal must be mutaqawwim, which means that to derive benefit from it must be permissible according to the shariah (ie it has value according to the shariah. Pig, alcohol etc are not permissible to derive benefit from and thus trading them is haram - they are ghayr mutaqawwim).
With regards to cryptocurrencies, there doesn’t seem to be any factor indicating it to be haram so it appears to be mutaqawwim too.
There are also other questions about the way it is traded that may influence its permissibility and impermissibility. The fact that it is not tangible but only virtual ought to be considered too. Some other time in sha Allah.
