Fatwa ID: 06846

 

Answered by: Maulana Ubaidur Rahman

 

Question:

 

Is cryptocurrency and forex currency permissible in Islam? If there is no loss in the currency?

 

 

In the name of Allah, the Most Gracious, the Most Merciful

 

Answer:

 

Cryptocurrency is a form of online currency exchanged between two parties and owned by individuals without the intermediary presence of a third authority figure, such as the bank or another regulatory body. This leaves both parties concerned independent of the effect or regulation of the bank or authority body. The transaction which takes place is between known commodities and people known to each other, meaning the direction of the sale and who the transaction is taking place with is all known[4] – even on an online platform.

 

Cryptocurrency does not exist in physical form like notes or coins but is still tangible and able to be used on its appropriate online platform between parties who trade and are aware of the procedures of online trade.

 

The traditional use of bitcoin will be regarded as an exchange procedure and simply at that it will be permissible. However, if the blockchains are lengthened and gambling takes place through the medium of cryptocurrency, for example, bitcoin, then this will be impermissible and not allowed.

 

Everyone deserves to earn sustenance and a livelihood income, but in Islam, this will only be permitted through permissible procedures and any forbidden route of earning money like gambling or illegal trade is prohibited and impermissible.

 

The purpose of trade is to receive benefit from the exchange of items and a price so that both parties benefit from the transaction which has taken place – the exchange of two articles/things of value[1].

 

وصحَّ استئجارُ دارٍ أو دُكَّانٍ بلا ذكرِ ما يعملُ فيه، وله كلُّ عملٍ سوى موهنِ البناء كالقِصارة. ولو استأجرَ أرضاً لبناءٍ أو غرسٍ صحّ، فإذا انقضتِ المدَّةُ سلَّمَها فارغة، إلا أن يغرمَ المؤجِّرُ قيمتَهُ مقلوعاً، ويتملَّكَهُ بلا رضا المستأجر إن نقصَ القلعُ الأرض، وإلا فبرضاه، أو يرضى بتركِه، فيكونُ البناءُ والغرسُ لهذا[2]

 

 

Only Allah knows best.

Written by Maulana Ubaidur Rahman.

Checked and approved by Mufti Mohammed Tosir Miah.

Darul Ifta Birmingham

 

 

 

 

 

[1] Azeezul Fatawa, page 600, Fatawa Darul Uloom Deobaond, and extracted from Shami [specofoc quoted text].

 

[2] Sharhul Wiqaayah, p289, as-Shamila.