By: Shaykh Usman Safdar
Qs: What is the ruling for cyprto, Bitcoin or digital currency?
Answer:
In general, currency is a mode of exchange. This is the case in the Shari’ah also. The ruling for currency is vast in the Shari’ah. Imam Malik (Rahimullah) has gone ahead to state: “If people start considering a piece of leather as currency and start to exchange on its basis, I will give the same ruling as any other currency for it.
The history of currency is something we will not go into the depth of today. We will talk about the Bitcoin in which there is doubt regarding its use.
Cryptocurrency, in essence is that currency that cannot be copied or duplicated. The most popular cryptocurrency has been what is called the Bicoin and its exchange has skyrocketed recently. Hence, people tend to speak about it more often.
The important concept behind Bitcoin is that the body regulating it is unknown. There is an entire B2B (business to business) system that is laid out for this currency. Undoubtedly, it is a safe and extremely secure system and none can duplicate Bitcoin.
The question now is, who is regulating Bitcoin? For example the US Dollar or Pakistani Rupee is regulated by a system. Banks and the government look after it and regulate. Hence, I can go into the bank and exchange a torn or an old Rupee for another one of the same value. The currency is being appropriately regulated and monitored as to what value it would be and what quantity will circulate. There are regulation authorities looking into the finer details of Bitcoin.
The fundamental objections the scholars have regarding Bitcoin it the fact that the body behind its regulation is unknown. We are unaware of who controls it. Yet, we do believe that the coming era is of digital or cryptocurrency as we see many countries accepting this as a form of exchange.
In my opinion and research, here is what I have to offer regarding this topic and including all cryptocurrencies and not only Bitcoin. I believe that in any country where this is accepted at the government level, there is exchange that exists with it and it is a known fact as to what authority is the regulator behind it, then it is permissible to use this currency.
If a government does not allow its use in the country, for example Pakistan does not allow its exchange and the regulator is also not known, then it is not permissible to invest in it nor use it. Another reason for this is that Bitcoin and such entities have been known to be used for smuggling and other such illegal activities. The scholars have, therefore fully objected to its use.
Slowly, the dust is settling and the picture is becoming clearer that undoubtedly , the cryptocurrency is a reliable form of exchange. Many people are accepting it. Recently, China has issued its own cryptocurrency and it is being circulated and used.
In conclusion, if it is supported and allowed by the government, then there is no harm in using crypto currency.
Transcribed and Translated from the video. Click here to watch:
