Cryptocurrencies: A Critical Analysis from the perspective of Islamic Law

ABSTRACT

Money has undergone numerous form changes throughout history, and as a replacement for the current system, it has started to take on a digital form. The newest kind of money is a cryptocurrency, which was created decentralized from any central authority. The range of applications for cryptocurrency is expanding daily. One of the most widely used cryptocurrencies is bitcoin, which was launched in 2009, ruled the cryptocurrency market, and caught the attention of the general public with its quick price increase. Early in 2018, the cryptocurrency market was worth more than $800 billion. The majority of cryptocurrency users seek to benefit from rising cryptocurrency values. These actions, however, do not adhere to the principles of cryptocurrencies. In terms of Islamic law, cryptocurrencies also present issues with legitimacy for users who are Muslims (Fiqh). Some Islamic scholars believe that cryptocurrencies are halal, notwithstanding the claims of many religious organizations and Islamic experts that they are haram. Descriptive analysis and content analysis are used in this paper. The findings of this study suggest that using Bitcoin and other cryptocurrencies are forbidden in Islam. Islam prohibits consciously trying to make money off the difference between buying and selling currencies, as this is considered riba. Since it incorporates components of maisir (gambling). Our study uses current literature and fatwas to conduct a multidimensional analysis of the illegitimacy of cryptocurrencies in terms of Fiqh.

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