The Supreme Fatwa Issuing Committee, composed of members of the Union of Islamic Scholars of Kurdistan, issued a fatwa banning cryptocurrencies on Thursday, saying that digital currencies “must definitely be prohibited” from the point of view of Islamic jurisprudence.
The fatwa was issued on April 5th. It was received by Kurdistan 24 on Thursday in response to a question from Kurdistan citizens about the use of cryptocurrencies from an Islamic perspective.
“The use of cryptocurrencies and similar currencies is prohibited from the point of view of Islamic jurisprudence,” the statement said.
The fatwa mentioned cryptocurrencies in general and the “One Coin” token in particular, but did not mention Bitcoin. It also provides reasons why cryptocurrency should be considered illegal in Islam.
“It is a virtual currency, and Islamic law does not approve of virtual currencies.”
Electronic currency exists only in digital form and allows people to make instant transactions and international transfers. However, there is some uncertainty regarding volatility, regulations and customer identification. The fatwa mentioned that the digital currency comes from an unknown source, it is unclear who issues it, they consider “such schemes to be confusing and unreliable.” It also stated that no international stock market recognizes the use of cryptocurrencies.
“These currencies do not have any guarantees from economic agencies, which means that cryptocurrencies have no international backing. Therefore, any funds invested in cryptocurrencies will be in a dangerous and unstable position.”
It was also stated that cryptocurrencies are not managed by a trusted office and the seller is often unknown. The anonymity of the seller directly affects and is the main unethical aspect of using digital currency. The committee recommended that residents of the region refrain from using cryptocurrencies “as they do not have legal support and do not operate in accordance with the law.”
Islamic scholars have explained that they may issue a new fatwa on the use of digital currencies if they are issued by a reliable and internationally recognizable source, far from anonymity. “The problem is not the use of cryptocurrencies, but the way they are created,” the statement says.
approx. ed. Previously, we covered in detail the topic functioning of cryptocurrencies in the Islamic world from the point of view of Sharia standards.
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