The local branch of the Indonesian religious organization Nahdlatul Ulama in East Java, a branch of one of Indonesia’s major Islamic organizations has declared bitcoin “haram,” or unlawful, under religious law, fatwa. The decision was made after a “fierce debate” attended by a cryptocurrency specialist who was invited to explain in detail the use of digital coins.
The decision was made as a result of Sunday’s “bahtsul masail,” an executive session in which the organization discussed crypto, according to Tempo. The article claims that members participating in the discussion were “dynamic” and “combative,” and that they came to the conclusion that utilizing cryptocurrency might jeopardize financial transactions’
Another point that was raised during the meeting is that crypto could serve as a tool for committing fraud. An announcement published on the website of the East Java Nahdlatul Ulama branch quotes Kiai Azizi Chasbullah, the “discussion’s certifier,” as saying: “Participants of the bahtsul masail formed a view, despite crypto already being acknowledged by the government as a commodity, that it cannot be legalized under the [Islamic sharia].”
During the gathering, they also reached the conclusion that “cryptocurrency has no sharia advantage as mentioned in fiqh” or Islamic jurisprudence. According to Indonesia’s newspaper, a “cryptocurrency specialist” who took part in the religious debate to explain “the correct use of cryptocurrency” confirmed this position.
The Islamic group’s fatwa follows after the Indonesian government declared last week that the country will not impose a broad cryptocurrency ban. The country’s Minister of Trade Muhammad Luthfi told local media that the executive branch would not follow China’s lead and reintroduce a blanket prohibition on all bitcoin transactions, as well as a crackdown on bitcoin mining and trading.
Cryptocurrency use is on the rise in Indonesia, which has the world’s largest Muslim population. This year, cryptocurrency trade has been booming, and data from Indonesia’s Futures Exchange Supervisory Board shows a 40% increase in transactions over the first five months of 2021. Last year saw a total volume of 65 trillion rupiah ($4.5 billion).
Islamic scholars, experts, and ordinary Muslims have diverse views on decentralized digital currency throughout time. The decision by a prominent Islamic organization in Russia’s Ingushetia republic to ban cryptocurrency trading prompted harsh reactions on social media in May. Last October, a prominent Malaysian sharia compliance expert declared that cryptocurrencies are genuine commodities.
