To understand the legality, halal or haram status of Cryptocurrency, we should have to dive into the reality, what it is, how it works, and how the graph of these currencies work. Let’s read out the fundamentals.
What is cryptocurrency:
People used to trade each other in exchange for items in the past, and there would be no concept of currency to buy or sell things. The system to trade in such a way or provide services in exchange for any trade is called the Barter system.
As time progresses, we are using paper currency, and the upcoming era will be of digital currency. Digital currency is a sort of digital file that is used as money to exchange goods and services. Cryptocurrency is a kind of digital currency. There are about 20,000+ cryptocurrencies currently on the ground.
Cryptocurrency works on the modern technology called the blockchain. Part of the allure of this innovation is its security. Blockchain is a decentralized innovation spread across numerous PCs that oversees and records exchanges.
Is it halal or haram for Muslims?
The speculative and tricky nature of cryptocurrency has put Muslim scholars in a mixed debate over its status of halal or haram. For example, Indonesia’s council of religious leaders had recently announced crypto dealing and investments as haram for Muslims, considering its elements of uncertainty and wagering. But in some Muslim countries, it’s legal to invest and to trade in crypto.
A few factors have raised some serious questions over its legality and the status of halal for Muslims. These factors are the following;
1-Cryptocurrency is not stable.
2- Each currency has its state backup, but we don’t see any serious backup support from any state in the case of crypto.
3- Its transactions will not be traceable.
4- It’s much easier to do money laundering or any illegal activities through cryptocurrency.
5- Its price fluctuates every second, and there are much more chances of uncertainty.
6- The rich are becoming richer, and the poor are becoming poorer.
7-The Most Important: The wealth will be in the hands of a few rich.
8- Some powerful companies and persons own cryptocurrencies. So they will be in a win-win situation.
9- Could you imagine that it can be controlled by a single tweet from a Business tycoon?
10- Cryptocurrency is not backed by any gold reserve like the other powerful currencies do.
11-Cryptocurrency is not under government regulation yet.
No doubt, Cryptocurrency has made transactions secure and effective but the risks and weaknesses are greater than the benefits. For more updates, visit The Internet Mind.