Senior religious authorities in Indonesia have ruled it haraam or sinful, for Muslims to utilize crypto assets as currency, according to a report on Bloomberg.
This announcement was made on Thursday by Indonesia’s highest religious authority, the National Ulema Council of Indonesia, or MUI, after it held an expert hearing.
According to Indonesia’s council of religious leaders, it remains forbidden for Muslims to deal in crypto-related transactions due to their speculative nature.
The council further went on to state that Muslims could not trade cryptocurrencies since they had aspects of uncertainty and betting.
According to the council’s head of religious decree, Asrorun Niam Sholeh, “If cryptocurrency as a commodity or digital asset can abide by Shariah tenets and can show a clear benefit, then it can be traded.”
MUI is the Shariah compliance authority of Indonesia, the world’s most populous Muslim country. The country’s finance ministry and central bank are both required to consult them on Islamic financial matters.
The implications of this announcement
Although it is doubtful that cryptocurrency trade would cease in this Muslim country as a consequence of the order, some Muslims may be discouraged from utilizing prominent cryptocurrencies such as Bitcoin and Ethereum. This would make local institutions reconsider the move to issue crypto assets.
According to the country’s commodities futures trading regulatory organization, BAPPEBTI, the country is home to more than 12% of the world’s Muslim population and 4.45 million crypto investors.
The country’s previous direction
The Indonesian Central Bank declared that cryptocurrencies as not a valid means of payment in January 2018.
The government prohibits the use of Bitcoin for payments, but residents are free to trade it as a commodity.
Indonesia’s Financial Services Authority has also, in the past, used cryptocurrency’s price volatility as a reason to dissuade investors from investing in the business, insisting that its fundamental worth was still unknown
However, in recent months, the Indonesian government has considered levying taxes on crypto trading earnings, owing to the digital currency’s rising popularity during the Covid-19 outbreak.
Indonesia’s central bank also announced plans to introduce a digital rupiah currency and said it was evaluating which platform to use, but no choice has been made.
Early this week, Bitcoin, the most significant cryptocurrency by market value, surpassed $68,000 to create a new high.
According to coinmarketcap statistics, the coin has a current price of around $65,000, followed by Etherum, which has a current price of around $4,700.
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