Muslims Should Not Use Cryptocurrencies for Payments: The New Fatwa Sparks Debate

Mufti Muhammad Taqi Usmani, president of Wifaq-ul-Madaris Al-Arabia Pakistan, has issued a fatwa regarding cryptocurrencies and their use for payments. Usmani is a highly authoritative voice in the Islamic world and is also the chairman of the Shariah board of the Accounting and Auditing Organization for Islamic Financial Institutions, which influences Islamic banking practices in the Middle East and Southeast Asia.

Despite the drop in Bitcoin, the cryptocurrency sector continues to attract investors and remains at the center of attention in financial markets, even in Islamic countries.

Can Cryptocurrencies Be Used for Payments?

The fatwa, to be considered as an academic legal opinion and not as a binding law, clarifies that cryptocurrencies cannot be considered "maal" and thus cannot be classified as wealth or property. Consequently, they cannot be used for making payments. This rule applies to all tokens and also to stablecoins linked to the US dollar. A man who questioned Usmani on the issue returned the products he had purchased with cryptocurrencies after receiving the response.

As clarified by the report from Muslimnetwork, Islamic scholars are divided on the use of cryptocurrencies. This is a highly relevant topic in the Islamic world, especially as cryptocurrencies are no longer limited to a niche group of users, but are widely accepted for the purchase of products and services.