The Tarjih Council and the Central Executive Tajdid (PP), an Indonesian Islamic organization, have declared crypto to be haram as an investment tool and a method of exchange (forbidden).
Tarih Muhammadiyah is the third Islamic group in Indonesia to issue a fatwa prohibiting cryptocurrency usage.
Why is it haram for Muslims to use crypto? – Indonesian group
According to CNBC Indonesia, the new fatwa states that cryptocurrency use is haram for two reasons.
One is that speculative digital assets such as Bitcoin are extremely volatile. Furthermore, because these currencies are not backed by any other assets, such as gold, and are considered “obscure,” they are considered illegal under Islamic law.
The second argument given by the group is that digital currencies do not adhere to Sharia fundamentals for barter systems or mediums of exchange rules, which require them to be legal money and approved by the state, or in this case, the central bank, and hence do not qualify as legal cash.
Despite many fatwas, cryptocurrency is now legal in Indonesia
As previously stated, Tarjih Muhammadiyah is not the first Islamic organization in the Asian country to issue a fatwa against cryptocurrency.
Despite previous sermons against digital assets, digital assets were legalized in September 2018 in the country with the world’s largest Muslim population. The Indonesian Ministry of Trade has approved the trading of cryptocurrency as a commodity.
Fatwas against the currency, regardless of its legal validity, cannot be completely dismissed, especially given the country’s Muslim majority. Muslim groups’ decisions are not official decrees, and they do not indicate an absolute ban on the crypto trade. However, its far-reaching implications in the Muslim country must not be overlooked.