Some scholars, like Mufti Faraz Adam and Shaykh Joe Bradford, argue that cryptocurrency can be considered halal (permissible) as it can be deemed a digital asset and medium of exchange. They suggest that Islamic principles of currency exchange must be applied to those dealing in cryptocurrencies.
- Not Permissible: Others, like Mufti Taqi Usmani and Dr. Haitham al-Haddad, believe that cryptocurrency is haram (not permissible) due to its speculative nature, lack of real value, and volatility. They also argue that it's not backed by any established economies or marketplaces.
Key Considerations
- Screening for Sharia Compliance: Before investing in cryptocurrency, it's essential to screen it for legality and Sharia compliance. Some scholars recommend using resources like the IFG Halal Crypto list to ensure compliance.
- Zakat on Cryptocurrency Holdings: For those who deem cryptocurrency permissible, Zakat (charity) is obligatory on holdings. The calculation of Zakat on cryptocurrency depends on the type of token and its intended use.
- Crypto Mining and Staking: Crypto mining can be considered permissible if it's based on a proof-of-work system, where miners provide a useful service by auditing the network. Crypto staking is also deemed permissible, but it's crucial to ensure the underlying coin is Sharia-compliant.
Islamic Finance and Cryptocurrency
Islamic finance experts emphasize the need for clear regulatory guidelines and a robust legal framework to protect investors and maintain financial stability. The Pakistan Crypto Council, launched in March 2025, aims to regulate and integrate blockchain technology into the country's financial landscape while ensuring a secure and forward-thinking approach to crypto adoption.