One of Indonesia’s top religious authorities has deemed Bitcoin (BTC) and other cryptocurrencies haram. The Ulema Council has therefore prohibited cryptocurrency trading, calling on 230 million Indonesian Muslims to drop coins that contradict Sharia law.
On 11th November, the Indonesian Ulema Council (MUI) issued an anti-currency fatwa. According to Reuters, Asrorun Niam Sholeh, the organisation’s head of religious decrees, compared digital assets to gambling, saying that they demonstrate “elements of uncertainty, wagering, and harm.”
Despite the fact that MUI decrees are not legally binding, this ruling may affect more than 230 million Muslims living in Indonesia, which has been home to incredible crypto trading growth over the past year. Between 2020 and 2021, the number of Indonesians involved in the crypto market increased from 4 million to 6.5 million. According to the Trade Ministry, in May, the value of all assets held by citizens was estimated at 370 trillion rupees, which is approximately £19.38 billion.
The Indonesian government has banned the use of digital assets as a means of payment and only considers the rupiah legal tender. Still, the authorities do not prohibit investing and trading tokens on futures and commodity markets. In addition, the country’s central bank is considering launching its own CBDC.
Although MUI has prohibited crypto trading, it is ready to make concessions for individual tokens if Islamic rules are met. According to Sholeh, for this, coins should possess “a physical form, a clear value, and a known exact amount”. He added that if cryptocurrencies comply with “Islamic rules, have an underlying asset and carry clear benefits,” they could be permitted by the Ulema Council.
How will MUI’s decision affect Indonesia’s cryptocurrency exchanges? How many people will give up their digital assets due to this religious ban? Stay tuned to find out.
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The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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