The top Islamic scholarly body in Indonesia, National Ulema Council (MUI), has declared Bitcoin (BTC/USD) haram, saying it is forbidden by the principles of Islam. A report unveiled this news earlier today, citing Asrorun Niam Sholeh, the Chairman of MUI’s Fatwa commission, who spoke after the council held an expert hearing. Reportedly, MUI believes BTC features aspects of uncertainty, wagering, and harm.
According to the report, MUI discussed BTC as part Ulama Fatwa Commission, which seeks to address Indonesia’s social, political, economic, and legal issues through the eyes of Islamic law. In the discussion, the council agreed to endorse BTC as a commodity or digital asset if it adheres to Shariah rules and if it can show a clear benefit.
With Indonesia housing the largest Muslim population, MUI’s has a lot of influence, seeing as the finance ministry and the central bank consult the entity on issues regarding Islam financing.
The Indonesian government supports cryptos by allowing digital assets to trade alongside commodity futures as investment options. Additionally, the government has been pushing for the creation of a crypto-focused exchange by the end of 2021. However, cryptocurrencies are not considered currencies, seeing as the rupiah is the only legal tender in Indonesia.
While MIU is a government-funded organization, its decision is not legally binding. Nonetheless, the decree might inspire legislation that might see the government might nip its crypto plans in the bud.
Crypto trading in Indonesia might suffer a blow
While MIU’s decree does not mean Indonesia will halt all crypto trading, it might prevent Muslims from investing in digital assets. Reportedly, crypto transactions in Indonesia amounted to $26 billion (£19.41 billion in the first five months of 2021.
With MIU declaring that BTC is haram, this value might plunge. Apart from investors, MIU’s decision might influence local institutions to stop offering crypto services.
While MIU has declared BTC haram, it is worth noting that other countries with a vast population of Muslims have varying outlooks. For instance, the United Arab Emirates allows crypto trading in Dubai’s free zone, and Bahrain has supported crypto assets since 2019.
This news comes after BTC recorded a new ATH at $68,789.63 (£51,361.78) yesterday. At the time of writing, the flagship cryptocurrency is changing hands at $65,299.89 (£48,756.16) after losing 4% over the past 24 hours.
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