Indonesia’s top Islamic body, the country’s authority on Shariah compliance, has
reportedly declared cryptocurrency haram, forbidden for Muslims under
Islamic law. The Indonesian Ulema Council explained that crypto has
elements of uncertainty, wagering, and harm.
Cryptocurrency Is Forbidden for Muslims Under Islamic Law in Indonesia
Indonesia’s Ulema Council (Majelis Ulama Indonesia or MUI), the
country’s top Islamic body that holds the authority on Shariah
compliance, has reportedly declared the use of crypto as a currency haram, forbidden under Islamic law for Muslims.
Asrorun Niam Sholeh, head of religious decrees, explained Thursday
after the council held an expert hearing that cryptocurrency has
elements of “uncertainty, wagering, and harm,” Bloomberg reported.
However, he noted that if crypto can abide by Shariah tenets and can
show a clear benefit, then it can be traded as a digital asset or a
commodity.
Indonesia, the country with the largest Muslim population, has an
estimated 231 million Muslims, which is 86.7% of the country’s
population.
The Ulema Council advises the country’s finance ministry and central
bank on Islamic finance issues. It comprises many Indonesian Muslim
groups including Nahdlatul Ulama (NU), Muhammadiyah, and smaller groups
such as Syarikat Islam, Perti, Al Washliyah, Mathla’ul Anwar, GUPPI,
PTDI, DMI, and Al Ittihadiyyah.
The MUI decree is not legally binding and does not mean
cryptocurrency is banned in Indonesia. However, it could deter Muslims
from investing and local institutions from issuing or providing services
in crypto assets.
In October, a provincial branch of one of the largest Islamic organizations in Indonesia, Nahdlatul Ulama, similarly declared cryptocurrency haram under religious law.
However, the Indonesian government has indicated that the country will not impose
an outright ban on cryptocurrency as China did. Crypto assets are
allowed to trade alongside commodity futures in Indonesia but cannot be
used as a currency. Meanwhile, the government is pushing to set up a
crypto exchange by the end of the year and Bank Indonesia has been
exploring a central bank digital currency (CBDC).
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