ISLAMABAD- An Islamic scholar has declared bitcoin ‘halal’ [permissible]under Sharia Law, contradicting earlier ‘edicts’ that insisted the popularcryptocurrency is forbidden in the religion.
The new statement has appeared in the publication of the study into whetherbitcoin is halal or haram preceded unprecedented price gains for bitcoin,which saw it’s value surge by more than $1,000 in less than an hour. Thishas led some analysts to speculate that news of bitcoin’s Sharia lawcompliance may have contributed to the price surge.
The study, by Muhammad Abu-Bakar of Blossom Finance in Indonesia, exploredthe functionality of bitcoin and other cryptocurrencies to determinewhether they fit with Islam’s strict definitions of money.
“Several recent fatawah issued by prominent Muslim scholars offeredincomplete or contradictory opinions on the topic,” said Matthew Martin,CEO of Blossom Finance.
“With all the confusion out there, we wanted to offer clear guidancesupported by solid research that benefits both laypeople and practitionersof Islamic finance.”
The study’s author points to the fact that bitcoin is recognised as a legalcurrency in Germany and therefore qualifies as Islamic money in thatcountry.
“Bitcoin is permissible in principal as bitcoin is treated as valuable bymarket price on global exchanges and it is accepted for payment at a widevariety of merchants,” the study states.