A Critical Analysis of Islamic Law and Fatwa of MUI (Majlies Ulama Indonesia) & NU (Nahdlatul Ulama’) on A Gold-Backed Cryptocurrency (OneGram) (original) (raw)

Analysis of Cryptocurrency in Islamic Perspective and Its Existence in Indonesia

1st Virtual Workshop on Writing Scientific Article for International Publication Indexed SCOPUS

Along with the erosion of traditional currencies, namely paper money and coins due to the impact of modernization of global financial technology, digital currencies have emerged, one of which is cryptocurrency. Cryptocurrency is a digital currency that uses cryptographic technology as a security system that is difficult to fake, transactions can be carried out via the internet (online) and each data transaction uses a certain cryptographic algorithm encoding. However, the existence of cryptocurrencies is still a matter of debate in Indonesia. This may be due to differences in Islamic law regarding cryptocurrencies. to find out how the existence of cryptocurrencies in Indonesia, secondly, to find out how cryptocurrency law is in an Islamic perspective. The research method uses a qualitative approach. The data in the study are secondary data derived from articles, websites, and other sources. The results show that cryptocurrency is an illegal transaction according to the government but not an illegal transaction because it has been inaugurated by the Commodity Futures Trading Regulatory Agency. Transactions in cryptocurrencies are legal but against the law because there is speculation, gharar and maysir.

Digital Currency Studies In Islamic Perspective

Dinar : Jurnal Ekonomi dan Keuangan Islam, 2021

This study aims to determine the best type of Digital currency according to Islam. This study uses the Analytical Hierarchical Process (AHP) method by developing several alternative digital currencies and attributes (indicators). In addition, this study also uses deductive qualitative analysis. Respondents in this study amounted to 100 people with the sampling technique Area Stratified Purposive Sampling and several selected respondents were interviewed. The results show that Gold-based Digital Money is the best type of Digital currency according to Islam. The main attribute of ownership in Gold-based Digital Money is Usury abolishment capability. Other factors are Gharar Eraducation, Maysir Eraducation, Justice / Fairness Principles, Medium of exchange, Measurement of value, Store of value and Differed payment instrument. In addition, this model can accommodate 7 criteria for the role of currency in the economy.

A qualitative approach to evaluate the reconciliation of GOLDX and OneGram in Islamic Finance

Zbornik radova Ekonomskog fakulteta u Rijeci: časopis za ekonomsku teoriju i praksu/Proceedings of Rijeka Faculty of Economics: Journal of Economics and Business, 2021

The purpose of this study is two-folded. The first purpose is to examine the perception of Islamic finance experts and Shariah scholars on the Islamic cryptocurrency (i.e., GOLDX and OneGram). The question is whether it has a role in reconciling cryptocurrency in Islamic finance. The second is to introduce the new Islamic cryptocurrency to serve these rich Islamic populaces. The study used a qualitative research approach by conducting interviews to explore the Islamic scholars’ views on the framework of the new Islamic cryptocurrency. The scholars have been deemed to meet particular requirements of having comprehensive knowledge and have extensive experience in both the Islamic Shariah and cryptocurrency. Accordingly, the number of such scholars was limited, and eventually, with the access offered only to five scholars from different Islamic countries. We thoroughly analyzed the collected data from the interviews. The findings reveal that Islamic law is absent on the essential model...

An Islamic Approach towards the Nature & Problems of Cryptocurrency

Al-Aijaz Research Journal of Islamic Studies & Humanities (Bi-Annual) Trilingual: Urdu, Arabic and English ISSN: 2707-1200 (Print) 2707-1219 (Electronic), 2020

In an Islamic framework, the scholars need to verify all aspects of the emerging phenomenon known as cryptocurrency. It works as an agent for the prevailing forms of currencies and substitutes the need to carry it everywhere in its physical form which may become a security threat. The theologians have always disapproved what seem to them innovative, alien and working as an agent of change. However, whatever may be their stance about previous innovations, the society had to act otherwise due to the compelling needs that had to be fulfilled. The difference of opinion between the Muslim Scholars about the cryptocurrency has once again divided the Ummah about its acceptance, substituting other forms of currency like fiat currency, plastic currency etc. No doubt these forms of currency have heavily damaged the financial markets due to their speculative nature. It seems that Muslim Ummah is again standing on the cross roads where it is unable to decide its fate. This article presents the basic concept of cryptocurrency & virtual money, its pros & cons, its status regarding Pakistani & Islamic Perspective. At the end, various conclusions and suggestions have been drawn.

E-2 an Islamic Approach Towards the Nature of Cryptocurrency

Al-Aijaz Research Journal of Islamic Studies & Humanities, 2020

In an Islamic framework, the scholars need to verify all aspects of the emerging phenomenon known as cryptocurrency. It works as an agent for the prevailing forms of currencies and substitutes the need to carry it everywhere in its physical form which may become a security threat. The theologians have always disapproved what seem to them innovative, alien and working as an agent of change. However, whatever may be their stance about previous innovations, the society had to act otherwise due to the compelling needs that had to be fulfilled. The difference of opinion between the Muslim Scholars about the cryptocurrency has once again divided the Ummah about its acceptance, substituting other forms of currency like fiat currency, plastic currency etc. No doubt these forms of currency have heavily damaged the financial markets due to their speculative nature. It seems that Muslim Ummah is again standing on the cross roads where it is unable to decide its fate. This article presents the ...

Cryptocurrency in Islamic Economic Principles

Dinasti International Journal of Education Management And Social Science, 2022

Islam as a religion that is flexible, dynamic and adaptive to the times. However, this certainly has ethical limitations and has the principle that values ​​in Islamic teachings must be the basis in every human activity, especially in community activities or muamalah. Therefore, this paper aims to critically describe cryptocurrency investment in Islamic economic principles.The method used in this paper is a scientific study approach with literature study, with data collection through the study of books, literature, notes, and various reports related to the problem to be solved. Based on the results of this study, cryptocurrency when viewed in Islamic economic principles does not meet the criteria as a medium of exchange and investment that is permitted in Islam. Cryptocurrencies at the beginning of their creation had a clear goal, a complicated system that was not acceptable to everyone. So that cryptocurrency can be manipulated and monopolized by certain parties. In addition, crypt...

Users Perception of Cryptocurrency System Application from the Islamic Views

International Journal on Islamic Applications in Computer Science And Technology, Vol. 7, Issue 1, March 2019, 13-25, 2019

Cryptocurrency is a peer-to-peer digital exchange system that uses cryptography to generate and distribute token. It is based on an encrypted, peer-to-peer network that facilitates digital barter. By using a cryptocurrency, users are able to exchange value digitally without third party oversight. In regard to the Islamic perspective of cryptocurrency, Muslim scholars and Shari'ah experts have developed varied opinions, some considering it to be permissible (halal) and others prohibited (haram). Among those scholars who consider it to be legally impermissible put forward their reasons, some of them arguing that it violates the constitutions of their governments. On the other hand, there are Muslim scholars who regard cryptocurrency as permissible in principle. Furthermore, there are many uncertainties related to the implementation of the cryptocurrency reported by many researchers and mentioned in the respective fatwas. A number of empirical studies have acknowledged the fact that cryptocurrency, from the Islamic perspective, constitutes the focus of most ongoing research work. Therefore, this current paper seeks to examine the user's perception of cryptocurrency system application from the Islamic views. The paper utilized qualitative research approach by conducting interviews in order to determine the user perceptions of the system. The interview data gathered were analyzed. The findings indicate that there is lack of Islamic law on the basic criteria for the use of cryptocurrency as either a legal or illegal machinery transaction tool. Hence, Islamic digital currency model is necessary for applying Islamic law to the use of cryptocurrency.

The genesis of Cryptocurrency in Islamic economics: Shariah analysis of HLC tokens

University Journal , 2018

Crypto cash and payment through electronic money has gained popularity after the computer system is adopted by financial industry. Furthermore, the research on application of blockchain technology in the Islamic economy system precisely the potential of Cryptocurrency in providing a better alternative to current fiat money system which will be the scope of this paper. The cryptocurrency system relies on the payment network, the infrastructure required to manage payments and avoid multiple spending using the same funds has always been costly and manage through a centralized banking network. This paper aims of exploring the potential and capability of Cryptocurrency in Islamic economics that fulfils the Shari'ah requirements which will provide financial and stable currency. The paper will adopt the Shariah mind to analyse Shariah experts different opinions on the Crypto currency. The method used for analysing this object includes a library research on related topics that helps understanding the functions of money and Crypto currencies as well as study of several cases that can assist in fulfilling the aims of this paper. Finally, the paper will use analyse the Shariah experts opinions on the Cryptocurrency and the area of Cryptocurrencies and blockchain requires further research from a Shari'ah perspective in order to facilitate a better understanding and create more awareness.

Cryptocurrency from the Perspective of Shariah

Universiti Utara Malaysia, 2018

The purpose of this study is to investigate one of the types in Fintech area, which is cryptocurrency from the perspective of Shariah. Until now, there are around 1,600 types of cryptocurrencies around the world. However, one of the most sought cryptocurrency in Malaysia is Bitcoin. Since it is still a new in Malaysia, the in-depth study on this has not yet been fully completed. By the realization to study this issue, a research has been conducted to become an eye-opener for those who want to dig deeper to gain the knowledge about this especially on the views from Islamic perspective or to be specific, from Shariah views. On the other hand, many issues arise regarding this cryptocurrency especially bitcoin. Therefore, this research will investigate the concept of money with its characteristics, and analyze if cryptocurrency does have all the characteristics of real money in it. Move forward to the next objective, this study will also explain on the Islamic perspective, and to be exact, Shariah views of cryptocurrencies as the currency or as a medium of exchange. Until now, there is still not much current views from the current scholars on this exact matters. Most of the views are regarding on whether their countries accepting it to be used or not, and the majority are the views from the government. Still, there is no specific hukm on the uses of cryptocurrencies. So, the outcome of this study will provide an important insight for potential customers who still want to invest their money in cryptocurrencies.

The requirements of cryptocurrency for money, an Islamic view

Heliyon, 2020

This research aims to evaluate the suitability of cryptocurrency as money from the Islamic perspective. Money, in the Islamic perspective, has specific characteristics and requirements, such as stability and is based on assets. Cryptocurrency may not fulfil this as it has queries as money from the Islamic perspective. The research method applied data of 23 cryptocurrency prices and related information. The result shows that cryptocurrency is hugely volatile and has limits to being called ‘money,’ as it is limited and used for speculation, which is prohibited in Islam. The research implies that Muslims would be reluctant to use cryptocurrency as money, as a currency of transaction. This reason raise an expectation that the cryptocurrency will not develop rapidly in Muslim countries.