Is crypto currency trading halal

Halal and Haramcoin

How to Debate Cryptocurrencies in the Islamic World

While European, American and Chinese central bankers and politicians debate digital currencies primarily on the basis of aspects such as the effects on their own currencies and their own room for maneuver (see French finance minister wants to ban Facebook currency Libra across Europe), the debate in the Islamic world has another dimension :

The question of whether such innovations are religiously permitted ("halal") or religiously prohibited ("haram"). A dimension that digital currency users outside of this world are now eagerly discussing, because 1.8 billion people who are potentially guided by something like this can also have an influence on the exchange rates.

"Times"

Whether the significant Bitcoin price increase that happened in 2018 shortly after the publication of a "working paper" by Mufti Muhammad Abu Bakar actually had anything to do with this publication is controversial. Also because this report does not absolve Bitcoins from the charge of "impurity" in every case, but only if a buyer purchases them with the intention of using them as a means of payment. If he buys them with the ulterior motive of a price increase, so Muhammad Abu Bakar, they would be "haram".

On the other hand, in addition to this well-known paper (which Muhammad Abu Bakar says is not a "fatwa"), there are various contributions from very different authorities that come to very different results. The Egyptian Grand Mufti Sheikh Shakwi Allam, for example, classifies cryptocurrencies as "impure" because, to him, they appear to be insufficiently objective for property according to the Koran ("Mal"). Possibly also because this argument could also be put forward with regard to bank money, he also mentions the importance for illegal transactions, which Bitcoins have in his perception.

"Gharar"

A certain closeness to the state, which is expressed here, is shown even more strongly in the fatwa of the Turkish religious authority on bitcoins: In their opinion, they are impure simply because the state cannot control them (see Erdoğan deposed the head of the central bank). In addition, one complains about their suitability for forbidden "Gharar" (speculation). The Palestinian Dar al-Ifta even takes the view that Bitcoin mining is a forbidden game of chance because it solves "mathematical puzzles" and is rewarded if successful.

On the other hand, it is precisely this generation via arithmetic that is an argument for Muhammad Abu Bakar to regard bitcoins as a religiously permitted currency. It guarantees scarcity and resistance to manipulation - and thereby also a certain safeguarding of prosperity, which in his opinion should be the essence of a currency. In this regard, he sees the cryptocurrency as "purer" than the currencies in Germany in the first half of the 1920s and in Venezuela today (cf. Escape to real assets and Bitcoin against state failure).

Explicit Halal cryptocurrencies

Companies that offer explicit halal cryptocurrencies are now also relying on such perspectives: The Malaysian company OneGram is one of them, the Dubai-based startup HabibiCoin is another, and Stellar from Bahrain is a third. The latter has even had the Halal quality confirmed by the local certification office SRB and has also obtained a license from the central bank CBB. With these approvals behind her, she also wants to attract customers in Saudi Arabia and other countries where the authorities are checking the Sharia law compliance of financial services.

The fact that the Islamic world accepts a new currency would in any case not be a historic novelty. The most famous example of this are the Austrian Theresientaler, who in the Orient Abu Kush ("father of the bird" or "the one with the bird") or Abu Noukte ("father of the pearl" or "the one with the pearl" [in the brooch the rather moderately veiled Austrian Empress]) and were so popular on the Arabian Peninsula that they were the standard currency there in the 19th century.

Another Habsburg coin, the Bohemian Joachimthaler, achieved even greater global success: The unit, which, strictly speaking, was minted in the Habsburg Empire only from 1526, but which is celebrating its 500th birthday this month, became a thaler in the German-speaking area and the Daler, in Spain and Latin America to the Dolaro and in the English colonies to the dollar. The independent United States of America then declared this "Spanish dollar" to be their main currency in their Coinage Act of 1792. (Peter Mühlbauer)

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