This is the conclusion reached by the largest non-government Islamic organizations in Indonesia.
The largest non-governmental Islamic organizations in Indonesia issued a fatwa declaring the use of cryptocurrencies for devout Muslims haram, an action contrary to Sharia.
The fatwa was drafted by the Tarjih Council and the Central Executive Tajdid of Muhammadiyah. The key problem that makes cryptocurrencies illegal means of exchange and investment instruments from the perspective of Islamic law is their speculative nature. The bottom line is that cryptocurrencies contain “gharar” (obscurity), they are not backed by any real assets.
Another reason is that cryptocurrencies are not legal tender. They do not meet the standards of Islamic barter. “Cryptocurrencies do not meet the values and benchmarks of Business Ethics,” reads the fatwa.
Cryptocurrencies had previously been deemed illegal in terms of Sharia norms by the Indonesian Ulema Council (MUI), the highest clerical body in the country, and major Islamic organization the Nahdlatul Ulama in the fall of 2021. The fatwas of Islamic organizations come amid huge increases in the acceptance of cryptocurrencies by the Indonesian population. In 2021, crypto transactions in the country exceeded $9.8 billion, recording a 1.000% rise over 2020.
Recall that Indonesia is the largest Muslim country in the world, its population is approximately 270 million people, of which about 88% are Muslim.
