Cryptocurrency has become a popular investment option in recent years, but many Muslims are unsure if it is halal or haram. In this article, we will explore the Islamic perspective on cryptocurrency investment and provide guidance on how to make sure your investments are compliant with Sharia law. Unlike investing, trading involves buying and selling cryptocurrencies in the short term. As long as you take possession of the digital asset itself, short-term trading is perfectly halal.
Therefore, cryptocurrencies do not meet Sharia standards as a form of currency. However, Sharia lending experts claim that cryptocurrencies can continue to have a place in the Islamic financial sector if they are traded as a commodity or a digital asset, provided they meet the requirements and show a clear benefit. While money as a medium of exchange is halal, the use of money as a commodity to make money is prohibited by Islamic law. According to most Islamic jurists, the concepts of crypto halal or crypto haram are not going to be easily solved.
There are some rules that consider crypto to be halal, while others consider crypto to be haram. However, most scholars so far are sure that cryptocurrency trading is Haram because it has no value in itself. Neither does any economic strength give it value or return an origin of any kind. It has not been adopted by any legitimate government entity and its value is only based on market fluctuation.
Most aspects and characteristics of bitcoin or other cryptocurrencies are haram, and are used for gambling and other similar tasks that are considered crypto haram. Cryptocurrency and many emerging areas of Islamic banking and finance are discussed in the online Islamic Banking and Islamic Finance Diploma Course offered by AIMS. But because they are products of financial engineering and objects of speculation, cryptocurrencies are uncomfortable with Islam. The principles of Islamic law, in addition to prohibiting the payment of interest, emphasize real economic activity based on physical assets and disapprove of pure currency speculation. I recently came across IFG's TikTok, where Ibrahim Khan explains five reasons why Muslims should invest in cryptocurrencies. The key to deciding how much to invest in crypto is to only put in an amount that you feel comfortable losing.
On the other hand, if your investment is worthwhile, cryptocurrencies have proven that you can earn lucrative returns of 10 times or more. Instead, they are interested in long-term investing in certain crypto projects for the technology and use case of that particular project. This has left many Muslims worried about investing in cryptocurrencies, especially in times of extreme growth, as they could not be sure whether their investment appreciation would be considered haram (prohibited) or halal (allowed) under Islamic law. A track record of outstanding investment results for partners and a proven track record in driving member engagement through investment education and knowledge. If you've decided that you want to invest in cryptocurrencies, you'll need to open an account with a cryptocurrency exchange. Before investing your hard-earned money into any cryptocurrency project, it's important to do your research and make sure that it meets all the requirements for halal investments according to Sharia law. When investing in cryptocurrency, it's important to remember that there is always risk involved.
It's important to diversify your investments across different projects and only invest what you can afford to lose. Additionally, it's important to stay up-to-date on the latest news about cryptocurrency regulations so that you can make informed decisions about your investments.