Cryptocurrency is Considered Forbidden in Islam

TheIndonesia.id - A branch of Nahlatul Ulama, one of the largest Islamic organizations in Indonesia, announces that cryptocurrency is haram or forbidden to use based on Islamic law. The East Java branch of NU decided last Sunday, 24 October 2021, that though cryptocurrency such as Bitcoin is recognized by the official as a commodity, still it cannot be legalized by sharia law.

Kiai Azizi Chasbullah of East Java NU said that there is a possibility of cryptocurrency losing its legality during a transaction. Thus, for this reason, cryptocurrency cannot be categorized as a commodity.

"Based on several considerations, including the existence of fraud in it, it is considered forbidden," said Kiai Azizi.

Cryptocurrency is considered to have no sharia benefits as described in Islamic law books. This decision is made after a team of cryptocurrency experts was invited to speak before the East Java NU Board explaining the crypto market. There was a heated debate during the discussion representing the pros and cons of this decision.

The results of this discussion were quite surprising. Last month, on 13 September 2021, an Islamic study forum organized by the Islamic Law firm and the Wahid Foundation concluded that cryptocurrency is allowed under Islamic law. The founder of the Islamic Law Firm (ILF) and Director of the Wahid Foundation, Yenny Wahid, separately stated that cryptocurrency is considered halal because it is free from usury compared to fiat money and conventional banks. It is supported by blockchain transactions which refer to direct peer-to-peer transactions without intermediaries.

In addition, according to him, crypto is halal as long as it is not prohibited by the state. However, he did not dismiss the opinion of cryptocurrency is not aligned with Islamic law because it has a high element of uncertainty. The price can change very quickly without a clear sentiment. Cryptocurrency is considered haram by some observers because the volatility level of cryptocurrency is very high which makes it closer to gambling.

The forum in East Java was held virtually and also attended by several clerics such as the caretaker of the Sukorejo Islamic boarding school KH Afifuddin Muhajir, the caretaker of the Al-Anwar Sarang Islamic boarding school KH Abdul Ghofur Maimun, and the Deputy Chairperson of the Nahdlatul Ulama national board, KH Abdul Moqsith Ghazali. Also present sources from the cryptocurrency sector such as the Head of the Commodity Futures Trading Regulatory Agency (BAPPEBTI) Indrasari Wisnu Wardhana, Commissioner of Indonesia Stock Exchange Pandu Patra Sjahrir, Founder and CEO of PT Pintu Kemana Saja Jeth Soetoyo, and Indodax Co-Founder and CEO Oscar Darmawan.

Nahdlatul Ulama was founded on 31 January 1926 in Surabaya, East Java. Since its founding, the East Java branch has been the largest and the most influential chapter of the organization that runs on Islamic preaching, education, philanthropy, and economy.