Cryptocurrency is forbidden for Muslims, Indonesia's religious council declares
- Indonesia's National Ulema Council said today that cryptocurrencies are haram
- Council said they are banned because the involve 'uncertainty, wagering, harm'
- Head of religious decrees said it could be traded provided it shows clear benefits
Indonesia's religious council has declared cryptocurrency forbidden for Muslims.
The National Ulema Council (MUI) said today trading in virtual monies is haram, or forbidden, under Islam because it involves elements of 'uncertainty, wagering and harm'.
MUI's head of religious decrees Asrorun Niam Sholeh confirmed the news and said the council would only be able to endorse cryptocurrency trading if it shows a 'clear benefit' and follows Sharia tenets.
The council's East Java branch made the same ruling last month but it was not confirmed nationally until today.
The decision follows a surge of interest in cryptocurrencies in Indonesia in 2021 with 6.5million new investors and a 1,772 per cent increase in national engagement with articles on the topic.
Indonesia, which boasts the world's largest Muslim population, uses the rupiah as its sole currency and virtual monies are not considered legal tender.
Indonesia's religious council has today declared cryptocurrency haram, or forbidden, for Muslims
The MUI is Indonesia's highest authority on Islamic finance and is consulted by both the finance ministry and central bank on compliance issues.
However, the decision is unlikely to end all cryptocurrency trading in Indonesia - the industry tallied $26billion in transactions in the first five months of 2021 - though it may lead to a decline in investments in virtual currencies by many Muslims.
Other Muslim-majority states have allowed some form of cryptocurrency trading - the United Arab Emirates allows trading in Dubai's free zone while Bahrain backs crypto assets.
It comes after El Salvador in September became the world's first nation to approve Bitcoin as legal tender after the country's congress voted to approve it in law in June.
The Central American country made history when it bought its first 200 bitcoins, becoming the first known nation to do so.
The US dollar had been the country’s official currency for the past two decades.
It later bought an additional 200 bitcoins, bringing its total investment Monday to about $21million based on its value at the time of the acquisition.
Bitcoin is now mandated as an accepted payment in the Central American country, and Salvadorans can use it for all purchases.
It comes after El Salvador (pictured an ATM that allows customers to turn cryptocurrency into US dollars in El Salvador) in September became the world's first nation to approve Bitcoin as legal tender after the country's congress voted to approve it in law in June
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