Muslims are prohibited from engaging in cryptocurrency trading – The Muslim council of Indonesia
Muslims are prohibited from engaging in cryptocurrency trading – The Muslim council of Indonesia
As reported by Bloomberg, Indonesia's highest religious authorities have declared it haraam, or sinful, for Muslims to use cryptocurrency as a form of payment.
This announcement was made on Thursday by the National Ulema Council of Indonesia, also known as the MUI, after an expert hearing. The MUI is Indonesia's highest religious authority.
Indonesia's religious leaders' council has stated that because cryptocurrency transactions are speculative in nature, Muslims are still prohibited from participating in such transactions.
In addition, the council stated that Muslims were not permitted to trade cryptocurrencies because of the element of uncertainty and gambling involved.
'If cryptocurrency as a commodity or digital asset complies with Shariah tenets and proves to have a clear benefit, it can be traded,' says Asrorun Niam Sholeh, the head of the council's religious decree department.
MUI is the Shariah compliance authority for Indonesia, which is the world's largest Muslim country. It is mandatory for them to consult with the country's finance ministry and central bank when it comes to Islamic financial issues.
As a result of the order, while it is unlikely that cryptocurrency trading will come to a halt in this Muslim country, some Muslims may be deterred from using popular cryptocurrencies like Bitcoin and Ethereum. Local institutions would be forced to reconsider their decision to issue cryptocurrency as a result of this.
More than 12 percent of the world's Muslim population lives in the country, and the country has 4.45 million cryptocurrency investors, according to BAPPEBTI, the country's regulatory body for commodities futures trading.
According to the Indonesian Central Bank, cryptocurrency payments are no longer accepted as a form of payment as of January 2018.
While the government forbids residents from using Bitcoin as a form of payment, they are free to trade it as a commodity in the market.
Previous attempts by Indonesia's Financial Services Authority to discourage investors from investing in cryptocurrency have been unsuccessful, despite claims that the cryptocurrency's fundamental value is unknown.
The Indonesian government, on the other hand, has considered taxing cryptocurrency trading profits in recent months, owing to the digital currency's surge in popularity during the Covid-19 outbreak, which occurred in late 2018.
A digital rupiah currency was also announced by Indonesia's central bank, which stated that it was currently evaluating which platform to use, but that no decision had been reached.
Bitcoin, the most valuable cryptocurrency in terms of market capitalization, reached a new high of $68,000 earlier this week, breaking the previous high of $67,000.
In accordance with coinmarketcap statistics, the coin is currently worth approximately $65,000, with Etherum coming in second place at approximately $4,700.
