Indonesia’s top Islamic body, the country’s authority on Shariah compliance, According to reports, the Indonesian Ulema Council has declared crypto haram. This is a violation of Islamic law that prohibits Muslims from using it. According to the Indonesian Ulema Council, crypto contains elements that can cause harm, uncertainty and wagering.
The Islamic Law of Indonesia forbids Cryptocurrency to Muslims
Indonesia’s Ulema Council (Majelis Ulama Indonesia or MUI), the country’s top Islamic body that holds the authority on Shariah compliance, has reportedly declared the use of crypto as a currency haram, forbidden under Islamic law for Muslims.
Asrorun Niam Sholeh, head of religious decrees, explained Thursday after the council held an expert hearing that cryptocurrency has elements of “uncertainty, wagering, and harm,” Bloomberg reported.
But he said that crypto should be able to follow Shariah principles and show clear benefits, so it could then be traded for digital assets or commodities.
Indonesia, the country with the largest Muslim population, has an estimated 231 million Muslims, which is 86.7% of the country’s population.
The Ulema Council advises the country’s finance ministry and central bank on Islamic finance issues. It comprises many Indonesian Muslim groups including Nahdlatul Ulama (NU), Muhammadiyah, and smaller groups such as Syarikat Islam, Perti, Al Washliyah, Mathla’ul Anwar, GUPPI, PTDI, DMI, and Al Ittihadiyyah.
Although the MUI decree does not have legal force, it does not prohibit cryptocurrency from being used in Indonesia. This could prevent Muslims investing or local institutions providing services to crypto assets.
One of the biggest Islamic groups in Indonesia, Nahdlatul Ulama declared cryptocurrency haram by declaring it to be illegal under Islamic law.
But, Indonesia’s government stated that they will not prohibit cryptocurrency trading as China has done. Although crypto assets can be traded alongside Indonesian commodity futures, they cannot be used to create a currency. The government has begun to push for the establishment of a crypto-exchange by the end the year. Bank Indonesia also explored the idea of a digital central bank currency (CBDC)
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