Is Zakat obligatory on Bitcoin and digital currencies? Here is the clear legal answer.

With the spread of digital currencies like Bitcoin and Ethereum, many people have wondered: Is Zakat obligatory on them like it is on regular money?

The answer: Yes, Zakat is obligatory on them provided that the following conditions are met:

1. Reaching the Nisab: That the value of the digital currencies you own is equivalent to 595 grams of silver.

2. The passage of a full lunar year: That a complete lunar year passes while you possess this Nisab.

3. Full ownership: That these currencies are under your complete control and you can dispose of them freely.

Scholars, such as Sheikh Abdul Rahman Al-Barak, have ruled that digital currencies used in buying and selling and that receive general acceptance are treated like paper money, and thus Zakat is obligatory on them at a rate of 2.5% of their market value at the end of the lunar year.

In summary: If you own digital currencies that have reached the Nisab and a lunar year has passed on them, you are obligated to pay Zakat from them, just as you do with cash.