Indonesia Non-Government Islamic Organizations Issue Warning Against Crypto Use
The Tarjih Council and the Central Executive Tajdid of Muhammadiyah, one of the largest non-government Islamic organizations in Indonesia, issued a new fatwa against cryptocurrency use, deeming it haram, or unlawful, for Muslims.
The fatwa, a ruling on the point of Islamic law, was issued on Tuesday and pointed towards two critical issues with cryptocurrencies that make them illegal as an investment tool and a medium of exchange under Islamic laws:
The speculative nature of cryptocurrencies makes them imperfect as an investment tool.
Cryptocurrencies don’t meet the standards of Islamic barter or medium of exchange laws. Islamic exchange medium require them to be legal tender and accepted by both parties.
However, Muhammadiyah is the third Indonesian Islamic organization to issue a fatwa against cryptocurrency use. Earlier in November 2021, the Indonesian Ulema Council (MUI), in the country declared crypto haram as a transactional tool. However, it noted that crypto-assets can be used as an investment tool if they abide by sharia tenets. In October 2021, another major Islamic organization the Nahdlatul Ulama (NU) also deemed crypto haram due to its speculative nature.
Despite the growing calls for crypto ban by Islamic organizations in Indonesia, the country has seen mammoth rise in adoption. The country recorded $9.8 billion in crypto transactions in 2021, recording a 1,222% rise over 2020. The recognition of crypto as a trading commodity has made it the primary choice of many international crypto exchanges.
– Parrot