Indonesian Islamic body forbids crypto as currency
The use of crypto as a currency is prohibited in Indonesia, the world’s largest Muslim majority country
EKO HO BLOG reports that the Indonesian Ulema Council (MUI), a leading group of clerics, has concluded that while using cryptocurrencies as a form of payment is prohibited in Islam, trading digital assets may be permitted, according to one of its leaders.
The use of crypto as a currency is prohibited in Indonesia, the world’s largest Muslim majority country, however investing and trading in digital tokens is permitted in the commodities and futures markets.
According to the trade ministry, the total value of cryptocurrency trading on the commodity exchange surpassed 370 trillion rupiah ($25.96 billion) in the first half of this year.
The total trading at the end of 2020 was valued at 65 trillion rupiah. The number of traders has reached 6.5 million up from 4 million.
As a means of payment, cryptocurrencies are forbidden according to Shariah law because they carry elements of uncertainty and harm, and are in violation of state laws, Asrorun Niam Sholeh, the MUI’s head of religious decrees, told Reuters.
Trading of cryptocurrencies as a commodity is also unlawful, with the MUI likening it to gambling, because it does not meet Islamic rules, such as for the goods to have a physical form, a clear value, and a known exact amount, among other reasons, he said.
However, the MUI allows trading of cryptocurrencies that meet Islamic rules, have an underlying asset and carry clear benefits, Asrorun said.
The commodities exchange allows the trading of hundreds of cryptocurrencies that meet the requirements of safety and good governance of the blockchain system.
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The MUI’s decree is not legally binding as it is not part of the government, but its ruling may affect investment decisions by some Muslims.
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