Indonesian Muslim organization assigns haram to cryptocurrencies

After the Indonesian government refused to impose a ban on cryptocurrencies, a branch of the large Muslim organization Nahdlatul Ulama banned their use by their followers.

The East Java branch of the Indonesian religious organization Nahdlatul Ulama held a meeting on October 24 with the involvement of a cryptocurrency expert and
made a decision about the prohibition of cryptocurrencies.

During the discussion, participants concluded that the use of cryptocurrencies can undermine the legitimacy of financial transactions, as it often serves as a tool for fraud. They formed the opinion that cryptocurrencies cannot be legalized in accordance with Islamic Shariah, although they are recognized by the government as a commodity. During the meeting, they noticed that “cryptocurrency is devoid of any advantages from the point of view of Sharia and corresponds to the concept of fiqh in Islamic jurisprudence.

As a result of the meeting, the local branch of Nahdlatul Ulama issued a legal opinion according to Sharia (fatwa) regarding the use of cryptocurrencies by devout Muslims. According to the fatwa, cryptocurrencies protected by cryptography and used as a transaction tool should be considered “haram” – a sin, and devout Muslims are prohibited from using them.

Recently, citizens’ fears that, following China’s example, the Indonesian government will ban cryptocurrencies has been allayed. But now a local religious organization has taken up arms against the cryptoindustry. Despite the fact that the decision was made only by a branch of a large Muslim organization, it could lead to serious consequences in the country with the largest number of Muslims in Asia.