Is a cryptocurrency a currency or a product/commodity? The case of bitcoin

Abstract

‘Cryptocurrency’ using blockchain technology is currently a most disruptive technology. We attempt to study the nature of this currency to decide whether it qualifies to be called a currency or not. Understanding its nature is important for governments, legislators, taxpayers and courts so that a proper regulation can be prepared. Once regulated, the taxpayers can know how much they would be taxed and the courts would know under which act it could pronounce judgements. This paper focuses on bitcoin as a specimen of cryptocurrency. The paper also attempts to study the ‘commodity’ -nature of the currency-, followed by the ‘currency’ -nature of the currency- and whether it can function as a currency. The paper also attempts to study the nature of this currency from Islamic perspectives and rebuts certain objections raised in respect of this currency.