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August 28, 2023Grand Mufti Shawky Ibrahim Allam of Egypt's Dar al-Ifta states that all uses of cryptocurrencies are ḥarām
Grand Mufti Dr Shawky Ibrahim Allam, of Egypt's Dar al-Ifta states that all uses of cryptocurrencies, including trading, buying, selling and renting, are religiously prohibited (ḥarām) due to their negative effects on the economy, the distortion of the market equilibrium, the lack of legal protections and above all due to the absence of financial supervision.
The Grand Mufti expressed his opinion, that cryptocurrencies violate the rights of monetary authorities, depriving them of their special prerogatives in this field, and can cause harm resulting from uncertainty, ignorance and fraud in banking processes, standards and in innovative values. For him, this conclusion finds support in the general statement of the Prophet Mohamed ﷺ that "He who deceives us is not one of us"
The Grand Mufti expressed his opinion, that cryptocurrencies violate the rights of monetary authorities, depriving them of their special prerogatives in this field, and can cause harm resulting from uncertainty, ignorance and fraud in banking processes, standards and in innovative values. For him, this conclusion finds support in the general statement of the Prophet Mohamed ﷺ that "He who deceives us is not one of us"
Considering the high risk that cryptocurrencies pose to individuals and to governments, the Grand Mufti concluded in accordance with the Islamic legal canon of “no harm” or “lā ḍarar wa-lā ḍirār”. This principle emphasizes the importance of avoiding any action that could cause harm or prejudice the interests of individuals and of society as a whole.
After an in-depth research and study, and after consulting economic experts and stakeholders regarding digital currencies, Bitcoins in particular, the Dar al-Ifta al-Misriyyah states that the trade of these currencies through the sale, rental and other similar activities is prohibited by Islamic law.
The main reason behind this prohibition is the negative impact Bitcoin trading can have on the economy. Furthermore, the decentralized and unregulated nature of Bitcoin can lead to market distortions and the loss of legal guarantees. The volatility and uncertainty of cryptocurrencies also make them vulnerable to fraud and fraudulent activity.
The fatwa also states that trading in virtual currencies requires a deep understanding of their technical functioning and economic implications. The creation of Bitcoin through a process known as "mining" uses powerful computers to solve complex mathematical problems. Bitcoin trading occurs through the transmission of encrypted messages without the need for intermediaries or government regulation.
Editorial Team
