Indonesian Islamic Organization issues fatwa against cryptocurrency – Bitcoin News

A provincial branch of one of Indonesia’s largest Islamic organizations has banned cryptocurrency under “haram” or religious law. The decision was made after “heated discussions” with an invited crypto expert to explain in detail the practice of using digital coins.

Cryptocurrency is considered ‘haram’ in Indonesia

The local branch of Nahdalatul Ulama, an Indonesian religious organization in East Java, recently issued a fatwa on the state of cryptocurrency under Islamic law. According to non-binding opinions, digital currencies protected by cryptography and used as transaction instruments are considered “haram”, meaning prohibited.

The decision came as a result of a discussion of “Bahatsul Masael” held by the organization on Sunday, October 24, according to the Indonesian news portal Tempo. Members involved in the debate, which the article described as “dynamic” and “heated,” concluded that the use of cryptocurrencies could undermine the legitimacy of financial transactions.

Another issue raised during the meeting was that crypto could act as a tool for fraud. An announcement on the website of the East Java Nahdalatul Ulama branch quoted Kiai Azizi Chasbulla, a “certifier of negotiations”:

Participants in Bahatsul Masael formed an opinion, although crypto is already recognized by the government as a product, that it cannot be legalized under the law. [Islamic sharia].

During the meeting, they decided that “cryptocurrency has no advantage from a Shariah perspective, as noted in fiqh,” or Islamic jurisprudence. According to Indonesian publications, this position has been confirmed by a “cryptocurrency expert” who took part in a religious debate to explain “the proper practice of using digital currency”.

The Islamic group’s fatwa comes after the government recently indicated in Jakarta that Indonesia is not planning to impose a massive ban on cryptocurrencies. Speaking to local media, the country’s commerce minister, Muhammad Luthefi, said the executive branch would not follow in the footsteps of China, which this year reiterated its ban on all crypto transactions and launched a crackdown on bitcoin mining and trade.

The popularity of cryptocurrency is growing in Indonesia, the country with the largest Muslim population in the world. Crypto trading has grown this year, and data from 13 domestic exchanges approved by the country’s Future Exchange Supervisory Board show a 40% increase in transactions in the first five months of 2021. Last year, the total amount reached 65 trillion rupees (4.5 billion)

Opinions about decentralized digital finance have varied over the years among Islamic scholars, experts, and ordinary Muslims. In May, the decision by a prominent religious group in the Russian republic of Ingushetia to ban transactions with cryptocurrencies provoked negative reactions on social media. Last October, a leading Sharia compliance expert in Malaysia said crypto assets are a legitimate commodity.

Do you think Nahdalatul Ulama’s fatwa on cryptocurrency will be supported by other Islamic organizations in Indonesia? Share your thoughts on the topic in the comments section below.

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