Ending an ongoing debate in the Islamic world and even more widely, Indonesia’s Blossom finance concludes that “the use of any lawful thing for an unlawful purpose cannot make the thing itself unlawful.”
The CEO of Blossom Finance, Matthew J. Martin, said that some Sheiks had previously argued that Bitcoin is not Sharia compliant because it can be used by criminals or because of its volatility.
“Rulings by Islamic scholars that claim Bitcoin is not permissible because it is subject to fluctuation and/or has the potential for use in illegal activities are not valid reasons under Sharia, since these factors are external to Bitcoin: the price of bitcoin is subject to supply and demand, just like commodities and fiat currencies, and the use of any lawful thing for an unlawful purpose cannot make the thing itself unlawful.”
It is still unclear whether this ends the debate in the Islamic world where Sheiks are discussing if cryptos are Sharia compliant. However, Martin says:
“Blockchain proves ownership of the asset – it proves you actually have the money you’re sending in a transaction.
Conventional banking literally loans money into existence and that is completely incompatible with the Sharia principles of money…
Blockchain gives you the mathematical proof of ownership and that’s overall much more in line with the spirit of Islamic finance than any digital fiat money.”
Islamic law, like most religious laws, prohibits usury, which is the foundation of the debt based modern financial system.
As far Sharia law is concerned, that makes Bitcoin even more attractive than the current money, at least for Indonesia.
In some Muslim countries, particularly in Egypt, clerics have merely apparently regurgitated government policy with the same old arguments that amount to little fewer criminals uses cars, therefore cars are illegal.
That may have assisted their rapid growth in recent years, with Indonesia’s $3.5 trillion yearly GDP making their capital, Jakarta, and some of the other neighboring capitals a perfect example of a very fast evolving 21st-century future.