The legality of cryptocurrency from an Islamic perspective: a research note

Abstract

Purpose Islamic scholars are not unanimous on the legality of cryptocurrency. Muslims are confused about the permissibility of cryptocurrency. Thus, this study aims to evaluate the cryptocurrency from Shariah’s perspective. Design/methodology/approach This study is qualitative and uses a deductive research approach. It drives conceptual and logical deduction from Qur'an and Hadith. Findings The cryptocurrency is an intangible currency without any precious metal or commodity backing. It does not possess any intrinsic value, and also its prices are highly volatile. On these grounds, cryptocurrency does not qualify as money in Islam. Social implications Cryptocurrency is not compatible with Islamic principles. It is not legal tender and is not backed by any government. Its prices are highly volatile, which opens the door for speculation. Muslims should avoid investing in it. Originality/value This study fulfills an identified need to evaluate cryptocurrency as money from Shariah’s perspective.