TL;DR Breakdown
- Islamic group says crypto is haram.
- Group gives two primary reasons why crypto use is forbidden for Muslims.
- Govt. position clear on crypto, maintains crypto is legal in Indonesia.
The Tarjih Council and the Central Executive Tajdid (PP), an Islamic group based in Indonesia, has proclaimed that the use of cryptocurrency both as an investment tool and as a medium of exchange is haram (forbidden).
Tarih Muhammadiyah is the third Islamic organization to issue such fatwa against the use of cryptocurrencies in Indonesia.
Why crypto use is haram for Muslims – Indonesia group
CNBC Indonesia reports that in the new fatwa, the group holds that crypto use is haram basically for two reasons.
One is that digital assets like Bitcoin are speculative and highly volatile. Also, these currencies are not backed by any other assets such as gold and are believed to be “obscure,” thereby making them unlawful under Islamic laws.
The group gave the second reason to be that digital currencies do not follow Sharia tenets for barter system or medium of exchange laws which need them to be legal tender and approved by the state, or in this case – the central bank, hence they don’t pass as a lawful currency.
Amidst multiple fatwas, crypto legal in Indonesia
As said previously, Tarjih Muhammadiyah isn’t the first Islamic group to pass a fatwa against cryptocurrencies in the Asian country.
However, despite previous preachings against digital assets in the country with the highest Muslim population globally, digital assets were legalized in September 2018. Indonesia’s Ministry of Trade approved the trading of crypto assets as commodities.
Despite its legal status, fatwa’s against the currency cannot be totally written off, especially with the dominance of Muslims in all nooks and cranny of the country. Decisions made by Muslim groups are not an official decree, nor do they imply an outright prohibition on cryptocurrency trading. But its far-reaching consequences in the Muslim country can not be ignored.
Amidst all these, the country recorded almost $10 billion in crypto transactions in 2021, with that number possibly shooting up this year with the entry of Binance exchange coming to the country.
Binance was in talks with some of Indonesia’s biggest companies to launch a crypto venture in the country.
What future lies ahead for cryptocurrencies in Indonesia amidst the multiple doctrines against it and enthusiasts? We can only keep watching.
