Cryptocurrencies and Zakat Applicability: An Analysis of the Fatwa Genre

Abstract

This article examines whether zakat is applicable to cryptocurrencies via a study of the fatwa genre on this topic. Fatwas from seven legal specialists in the Muslim world will be examined. These juristic opinions range from considering cryptocurrencies to be permissible to those that consider it prohibited. However, across this spectrum these authorities argue for zakat application to cryptocurrencies. The analysis will isolate and identify the relevant proof texts and principles relied upon. It will be shown that a unifying theme across the fatwa genre is of how thamaniyya is vital in linking cryptocurrencies to zakat-applicability. The study concludes that Islamic Finance successfully contains a theoretic concept, namely thamaniyya, that can help Muslim scholarship engage with advancements in cryptocurrencies regardless of future technological innovations. This study is novel for focusing on fatwa analysis through a theoretical orientation. This article sheds light on how contemporary fatwas are used in the field of Islamic Finance to negotiate between the jurisprudential tradition and cutting-edge developments in cryptocurrencies. The study is limited in not considering socio-political factors in the analysis. It is hoped the results of this study can highlight how disparate legal opinions in Islamic Finance actually share common ground.