No Bitcoin believers: Indonesia’s religious leaders forbid muslims from using crypto as currency
Indonesia’s religious council has declared the use of crypto assets as currency unlawful for muslims.
At a meeting of the National Ulema Council, MUI, clerics deemed cryptocurrency to be forbidden under Shariah law because it includes elements of uncertainty, wagering and harm.
Trading cryptocurrencies as a commodity is also unlawful because it does not meet Islamic rules, such as for the goods to have a physical form and a clear value Asrorun Niam Soleh, head of religious decrees told Reuters. He added that a crypto could be traded as a commodity only if it abides by religious laws and demonstrates a clear benefit.
The government and central bank of Indonesia, which is home to one of the world’s largest Muslim populations at around 237m, frequently consults the MUI on financial decisions – the group determines whether policies are Shariah compliant.
The decision to ban crypto comes after media outlets reported that Indonesia’s government was mulling a tax on the profits of crypto trading in order to bolster revenue amid the Covid-19 pandemic.
The decree risks smothering Indonesia’s nascent crypto community and follows a recent crackdown on digital assets in China.
While the country’s central bank declared crypto “not a legitimate instrument of payment” in January 2018, trading has been permitted allowing Indonesia’s crypto community to swell to around 4.5m investors as of May.
A recent survey by Coinformant found that Indonesia ranks as the world’s top “crypto hotspot.”
In Indonesia online engagement with crypto has grown by 1,772 per cent this year as more people than ever before read articles and searched for information about digital assets. Annual search volume jumped by 575.2 per cent, beaten only by Chile where search volume increased by 707 per cent in 2021.
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