Fatwa ID: 08198
Answered by: Maulana Abdurrahman Mohammad
Question:
Please can I ask if DigiGold investment as offered by the Royal Mint is halal? I have a small amount invested, about £150.00, but will withdraw if not permissible.
As I understand it, the Royal Mint holds the actual gold. The money I invest buys me maybe part of a gold bar. I can increase the share. The gold can never be delivered to me. It is held in storage. I can sell it back to the Royal Mint if I wish to, whatever I own.
On the Royal Mint website, it is explained as follows: https://www.royalmint.com/digital-investments/digigold/
DigiGold is a simple and cost-effective way to own physical gold, silver and platinum in quantities to suit all budgets, allowing you to purchase and own a fractional amount of large gold, silver and platinum bars that are held securely in The Vault®.
These large bars allow us to offer economies of scale and pass on the savings to customers. Unlike buying coins or bars, it enables you to purchase gold, silver and platinum based on value rather than weight, e.g. £25.00 instead of a 1 ounce coin or bar, providing you with control and flexibility. Please note that DigiGold products cannot be delivered.
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
Many scholars have differed in permitting or prohibiting these types of investments. Because it is impossible to take Qabdah (possession) of these digital investments, buying these currencies would be impermissible.
If you know the sold item and the price, then we say that the ruling on the sold item, if it is a movable item, is that it is not permissible to sell it before taking possession. [1]
Online gold investments do not represent actual gold, as these vouchers cannot be redeemed for actual physical gold. You are buying something you can never actually own. It is like buying nothing and selling nothing. Rather, due to the fluctuations of their prices, it is similar to gambling with money in exchange for a different amount of money with no intermediary exchange.
There are many hadith where the Prophet (ﷺ) prohibits selling things before taking them into possession.
Hakim asked (the Prophet): Messenger of Allah, a man comes to me and wants me to sell him something which is not in my possession. Should I buy it for him from the market?
He replied: Do not sell what you do not possess. [2]
Therefore, investing in these digital currencies would be impermissible.
Only Allah knows best.
Written by: Maulana Abdurrahman Mohammad
Checked and approved by: Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
[1] وَإِذَا عَرَفْت الْمَبِيعَ وَالثَّمَنَ فَنَقُولُ مِنْ حُكْمِ الْمَبِيعِ إذَا كَانَ مَنْقُولًا أَنْ لَا يَجُوزَ بَيْعُهُ قَبْلَ الْقَبْضِ
(Al-Fatāwā Al-Hindiyyah, vol 3, pg. 13, Al-Maṭba’ah Al-Kubrā Al-Amīriyyah)
[2] حَدَّثَنَا مُسَدَّدٌ، حَدَّثَنَا أَبُو عَوَانَةَ، عَنْ أَبِي بِشْرٍ، عَنْ يُوسُفَ بْنِ مَاهَكَ، عَنْ حَكِيمِ بْنِ حِزَامٍ، قَالَ يَا رَسُولَ اللَّهِ يَأْتِينِي الرَّجُلُ فَيُرِيدُ مِنِّي الْبَيْعَ لَيْسَ عِنْدِي أَفَأَبْتَاعُهُ لَهُ مِنَ السُّوقِ فَقَالَ “ لاَ تَبِعْ مَا لَيْسَ عِنْدَكَ ” .
(Sunan Abi Dawud 3503, Book 24, Hadith 88)
