#PowellWatch The ruling on trading digital currencies (such as Bitcoin, Ethereum, and others) is a contemporary issue that scholars and Sharia bodies have differed on, due to the fact that digital currencies are relatively new and combine advantages and risks.
The first opinion: prohibition
Some scholars and bodies have prohibited trading them, relying on:
The abundance of ignorance (ambiguity in its reality and value).
The severity of volatility and speculation that resembles gambling.
The possibility of using them in prohibited transactions (money laundering, financing prohibited activities).
The second opinion: permissible with conditions
Other scholars have permitted trading on the condition that:
The currency itself is permissible (not linked to a prohibited project).
The transaction is conducted without usury (i.e., there is no interest lending or prohibited derivative contracts).
The dealings are direct (real buying and selling) and not bets or fictitious contracts.
The trader must bear the risks knowingly and consciously.
The prevailing opinion among many contemporary jurists
Dealing in original digital currencies (such as Bitcoin) is permissible if it is real buying and selling, and on the condition of avoiding usury and gambling.
As for trading in derivatives (such as futures contracts or leveraged margin trading), it is often prohibited as it is based on gambling and usury.
