Middle East

Islamic scholars dismiss digital currencies as banned-Doha News

Cryptocurrencies are becoming an increasingly popular medium of exchange. However, some claim that it does not comply with Shariah law.

Dr Ali Al-Qaradaghi, Secretary-General of the International Muslim Ulama Union, states that investment in cryptocurrencies or digital currencies such as Bitcoin and other corresponding currencies is prohibited by Shariah law.

Cryptocurrencies are decentralized digital money designed to act as a medium of exchange over a computer network. There is no government or bank regulation.

After a detailed investigation on this topic, Qatar-based Dr. Al-Qaradaghi Affirm That Investing in these coins is considered prohibited by Islam, and one of the reasons given is as follows:tahreem al wassail’ (Prohibition of means).

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He argues that the means of handling money can be potentially at risk.Riva ” This means the exploitative benefits of trade and business under Islamic law.

He explains that digital currencies are banned for two reasons. By its very nature, digital money lacks the value elements found in, for example, gold and silver. He states that, in contrast to credit and banknotes, digital currencies are not regulated by the government and are repeating the banned composition.

Commenting on this topic Dr. Abdullah Jim Abozide says he is an associate professor of Islamic finance at Hamad bin Harifa University and an expert in Islamic finance. Doha News The cryptocurrency “is not yet eligible as a valid currency because it does not meet Shariah’s requirements or requirements for a valid currency.”

“It’s also not useful for trading or investing, taking into account the high volatility of the risks associated with trading and the fact that the entire process resembles gambling,” he adds.

In one of his published works, “Does Shariah Recognize Cryptocurrencies as a Valid Currency?”, Dr. Abozide said that one of the challenges of digital currencies is “getting people’s trust.” Is it possible? It is regulated by trusted authorities. “

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Although there is no consensus among the Islamic financial sector regarding the acceptance of digital currencies, Digital and Innovation Advisor Devesh Vijay said: However, the COVID-19 pandemic is accelerating the digital agenda, so there is no longer a choice. It’s essential to survive, “says KPMG. report Their Qabal Bank Perspective in a 2021 dissertation.

Future outlook for cryptocurrencies

Sheikh Abdullah bin Saud Altani, President of the Qatar Central Bank (QCB), said: Restrictions are imposed due to the inherent risks associated with cryptocurrencies as they pose significant challenges to the stability and integrity of the financial system. However, the QCB closely monitors the development of technical and regulatory cryptocurrencies and will eventually make appropriate decisions. “

There have been several attempts to launch Shariah-compliant digital currencies such as “One Gram” and “Hello Gold”. These are underpinned by physical assets (in this case gold) to ensure that they comply with Shariah’s definition of gold. These Shariah-compliant cryptocurrencies have been approved by the Shariah Compliance Advisory Farm, but there is still no consensus on what constitutes a Shariah-compliant cryptocurrency. ” paper Added.

“Until a definitive Islamic decision is issued by a recognized authoritative institution or institution, Islamic investors may take either of conflicting decisions by Muslim scholars, Shariah’s advisory firms, financial and financial regulators. You will have to choose. “

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