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Cryptocurrencies from Islamic perspective

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Date
2023
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Abstract
This paper aims to derive a compatible Shariah opinion on the permissibility of using cryptocurrencies by Muslims by reviewing the opinions expressed by Shariah scholars on the permissibility of cryptocurrencies. This is a qualitative desk review research where the opinions expressed by the Shariah scholars on the permissibility of cryptocurrencies and the issues related to it have been analyzed using the literature. All the Shariah parameters checked pertaining to currencies have been studied and assessed to derive the Shariah opinion. The research findings suggest that cryptocurrencies do not fully meet the characteristics of money according to Shariah principles. Scholars debate their classification as a medium of exchange due to concerns about volatility, intrinsic value and governance. The treatment of cryptocurrencies varies, and their decentralized nature prevents monopolization. Governance and resistance to manipulation are facilitated by blockchain technology. Classifying cryptocurrencies as hard money and their recognition as the primary unit of account face challenges. While they can be a store of value, price volatility and regulations must be considered. The network effect is crucial for their success, and their supply is controlled through complex protocols. These findings have implications for policymakers in Islamic finance.
Keywords
Cryptocurrency , Islamic perspective , Money , Shariah , Digital currency , Nuqood
Citation
Hassan, M. K., Muneeza, A., & Mohamed, I. (2023). Cryptocurrencies from Islamic perspective. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-09-2022-0238
Publisher
Emerald Publishing Limited
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