The Ulema Council of Indonesia (MUI) is the main body of Muslim clerics. It has ruled that the use of cryptocurrencies as a means of payment is illegal in IslamAnnounced one of its leaders on Thursday.
Indonesia is the largest Muslim-majority country in the world, so the “haram” or “ban” of cryptocurrencies is good news for the Islamic world.
The move comes in the wake of a conversation with Reuters, according to Azorun Niamh Sholay, head of MUI’s religious mandate, who said cryptocurrencies did not represent the values of Islam.
“Cryptocurrencies are prohibited under Islamic law because they contain elements of uncertainty and harmfulness, and violate state laws,” he said.
It is also illegal to trade cryptocurrencies as a commodity The MUI compares it to the game because it does not conform to Islamic rules, meaning the products are known for their body shape, clear value and exact size., Among other reasons.
However, MUI allows trading of cryptocurrencies in accordance with Islamic rules, has basic assets and clear benefits, Dijo Azrorun.
The exchange of raw materials allows the trading of hundreds of cryptocurrencies that meet the security and good management requirements of the blockchain system.
Although the mandate is not legally binding, since MUI is not an official body of government in Indonesia, it has authority over Sharia compliance in the world’s largest Muslim-populated country, and was consulted by the Ministry of Finance and the Central Bank on Islamic finance matters.
This means that the end of the MUI will not stop all cryptocurrency trading in Indonesia, The order would prevent Muslims from investing in assets and force local companies to reconsider offering crypto assets.
For example, According to Bloomberg, the Indonesian central bank is considering issuing a digital currency of its own, and although such a decision has not yet been made, such an order could force them not to pursue their plans.
The total value of cryptocurrency trading on the Indonesian Commodity Exchange has reached 370 trillion rupees ($ 26 billion) as of May this year. According to the Ministry of Commerce.
Total trade at the end of 2020 was 65 trillion rupees and the number of traders increased from 4 million to 6.5 million in the previous year.
The position of Indonesian religious leaders may differ from that of their counterparts in other Muslim-majority countries. The UAE has allowed crypto trading in the Dubai Free Zone, while Bahrain has supported crypto assets since 2019.