SHARIAsource

Dr. Ali al-Qaradaghi considers the question whether cryptocurrency is a legitimate currency (ʿumla). Traditional Islamic law rulings define currency to reflect instruments with intrinsic value, such as gold or silver, or with credit value, which requires state backing. In his view, cryptocurrency has no inherent value [in the Middle East]. Rather, in his estimation, cryptocurrency’s value is in transactions. But even when it is used as credit, it has no state behind it or agreed-upon recognition [again, specifically with respect to the Middle East]. Thus, he concludes, it is not actually ḥaqq mālī (a property claim). Rather, it is a program or algorithm. He concludes on those grounds that investment in it is religiously prohibited (muḥarram) but only by means of the concept of “prohibition of the means" (taḥrīm al-wasāʾil). This is the lightest of prohibition types, because it is not prohibition for excessive interest (ribā) but to protect property (ḥifāza ʿala māl).