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Not long ago, the national council of Islamic scholars stated that Muslims in Indonesia should not be permitted to trade crypto as it exposes investors to unnecessary risk and goes against Islamic law. From there, Indonesia’s Ulama Council announced a fatwa on bitcoin, which is classified as a “non-binding religious ruling.” Bitcoin has since been declared haram, or something that is forbidden.
Indonesia Has Become a Crypto Hotspot
KH Asrorun Niamm Sholeh – the council’s head of religious decrees – explained in an interview:
Cryptocurrency as currency is forbidden because it has elements of uncertainty, harm and doesn’t meet the Islamic requirement according to Shariah [law].
The move comes as something of a blow to Indonesia, which has seen crypto activity and popularity within its borders explode in recent years. Per data from the Ministry of Trade, the number of people investing in crypto in Indonesia has grown from approximately four million to about 6.5 million over the course of the last 12 months. In fact, there are now more people trading crypto in Indonesia than those trading standard assets like stocks.
Putri Madarina – a certified financial planner and founder of Halal Vestor – says that much of the crypto boom that has occurred within the country can be attributed to social media, which has been spreading crypto-based messages and advertisements for some time. She says:
It is even booming during the COVID-19 pandemic. We are actually in the second wave of the crypto trend.
Investing in crypto for the past four years, she says the Islamic decree against bitcoin and its digital cousins has not prevented her from trading crypto, nor has it lessened the number of customers she’s witnessed. She explains:
What we bought is a digital commodity, like a collection that we consider valuable. The price is driven by the higher appreciation from the people, like vintage cars.
She also says that cryptocurrency is considered a “mal,” which is a piece of property that can take on many forms. This is an Islamic term all itself, and she says it describes assets like BTC to a tee:
So, as a medium of exchange, I think it’s not a problem. As a property, I don’t see any Islamic ruling being violated, unless it was made to be a means of deception, which is also an external factor that we can’t control.
Some Feel Very Bound to the Rules
But while she may feel comfortable with crypto, other Muslims say they are fully bound to the fatwa and have done away with all their crypto investments forever. One is Ainun Najib, who works in IT. He began investing in crypto back in January of this year and accumulated roughly $45,000 in digital funds. He has since sold his assets, saying:
I am a Muslim. In the context of Islam, I follow the fatwa.
