Indonesia's top Islamic body, The National Ulema Council (MUI), has declared the trading of cryptocurrencies like Bitcoin and Ethereum haram, or forbidden according to Shariah law.
The religious authority cites various aspects of crypto that they say don't really align with Shariah law, including elements like “uncertainty, wagering, and harm" according to the chairman of MUI’s Fatwa Commission, Asrorun Niam Sholeh.
The need for a "clear benefit".
IMAGE: Muhammad Raufan Yusup / Unsplash
The announcement comes as a bit of a shock, considering the meteoric rise of crypto in the region. It's also potentially a huge missed opportunity, considering the fact that Indonesia is home to the world's largest muslim population.
Sholeh says cryptocurrencies need to be governed or at least aided by Shariah guidelines in order for its trade to be permitted in Islam. Additionally, crypto needs to show that it has "clear benefits" in order to be officially endorsed by MUI.
IMAGE: Reuters / The Bangkok Post
Despite the declaration, however, this doesn't mean that crypto trading has been banned in Indonesia. The fatwa declaring it haram merely serves as a piece of "legislative inspiration", and people in the country (whether muslim or not) are still free to trade cryptocurrencies as they please.
According to a Bloomberg report, the declaration still might have some power over the millions of muslims in the country. Though it isn't illegal, the fatwa might make muslims uncomfortable with trading crypto, especially if they're surrounded by other muslims who abide by fatwas rigorously.
Further than that, the fatwa could also impact the decision of local institutions in adopting the trading of cryptocurrencies, making the popular financial instrument less accessible in the country.
Basically, it's all a mind game now.
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Cover image sourced from Ehteshamul Haque Adit / Unsplash and Reuters.
