A Fiqh Analysis of Mainstream Fatwas Prohibiting Bitcoin

Abstract

This chapter applies classical Islamic jurisprudential principles to analyse mainstream fatwas prohibiting Bitcoin, evaluating whether their core arguments sufficiently align with the established frameworks of Islamic law. Despite frequent claims that Bitcoin's intangible nature, volatility, and lack of official state issuance render it impermissible (Haram), the research finds these arguments often rest on incomplete analogies and misinterpretations of foundational Fiqh concepts. Drawing on texts regarding Gharar (excessive uncertainty), Qimar (gambling), property (māl), and state authority in monetary issuance, the study highlights that historically, Sharia recognized various intangible or privately issued assets, and not all forms of risk equate to impermissible speculation. Additionally, the principle of ‘blocking of means’ (sadd al-dharāʾiʿ) requires a more precise linkage to clearly Haram outcomes. By scrutinizing potential methodological oversights in prohibitory rulings, this chapter underscores that blanket bans may overlook Bitcoin's potential to fulfil key Sharia objectives – such as wealth preservation – when used responsibly. The analysis ultimately advocates more nuanced, evidence-based approaches to Bitcoin's permissibility, rooted in robust Fiqh and accurate technical understanding.