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Egyptian Clerics call Bitcoin trading as “unlawful”

Jan 05, 2018 Posted /  5162 Views

Egyptian Clerics call Bitcoin trading as “unlawful”

Grand Mufti Shawki Allam Egypt’s highest official of religious law has issued a fatwa and called Bitcoin trading “unlawful” under Sharia law. The reports were circulated by online publication Ahram. Allam wrote in the fatwa that Bitcoin is not an “acceptable interface of exchange” and as such it should be considered as unlawful to trade. The cleric also elaborated that Bitcoin is being used for money laundering as he pointed out that it does not only account to government’s control over the digital currency, in fact, Bitcoin can also potentially destabilize the Egyptian economy.

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Allam also remarked that Bitcoin is unconstructive and can hamper the legal safety” of the dealers’. He then stated, "Bitcoin is forbidden in Sharia as it causes harm to individuals, groups and institutions.” In interviews with different media outlets, some of the grand mufti’s advisors told that Bitcoin could be openly used to fund terrorists. Moreover, in last few announcements, it was made clear that even Egypt’s government is also no fan of cryptocurrencies, as they have repeatedly called Bitcoin as deceptive and one, which might account for legal liability.

The mufti measured up to cryptocurrency’s trade exchange to gambling, which is banned in Islam “due to its direct responsibility in financial ruin for individuals.” In December, well-admired Saudi cleric Assim Al-Hakeem pronounced that digital currencies are banned under Islamic law because they are "ambiguous."

Calling it Halal

Since last few months, many analysts and enthusiasts have come forward in open to talk about the status of Bitcoin under Sharia law. In fact, Matthew Martin of Blossom Finance has come up with a unique explanation comparing Bitcoin with halal. In one of the pieces he wrote that “As a payment network, Bitcoin is halal. In fact, Bitcoin goes beyond what more conventional closed banking networks offer.” According to him, conventional bank networks provides promise and security, however, they own private ledgers, which bears no guarantee that the originator actually owns the underlying assets. He remarks that Bitcoin guarantees the transaction with mathematical certainty that the creator of the exchange owns the underlying assets in reality. Traditional banking systems operate on the notions of fractional reserve, which is essentially prohibited in Islam.

Further, Matthews at a point of time agreed that Bitcoin will not be considered as legal tender under Islamic law, as according to the historical records, Islam has only particular commodities which hold fundamental value as money including things like gold (Dinar), silver (Dirham); rice, dates, wheat, barley and salt. There is not a strict interpretation of the law of what can be qualified as money, which is why Bitcoin potentially misses the mark. However, the same explanation tells us that we cannot even call it entirely non-Islamic.

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Tags: Bitcoin trading Egyptian Bitcoin Bitcoin illegal

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