JAKARTA – What is crypto law? Halal or Haram? Regarding crypto legal issues that have recently surfaced, the Indonesian Ulema Council (MUI) has officially issued a fatwa against crypto if it is used as currency.
The illicit fatwa against crypto is stipulated in the VII Ijtima Ulama in Indonesia. Is the fatwa correct considering the technology that underlies cryptocurrency, namely blockchain, is starting to be used massively by various companies and agencies?
For information, blockchain is like a digital ledger that records all transactions and cannot be changed or falsified. MUI considers that cryptocurrencies contain gharar, dharar, and are not in accordance with Law Number 7 of 2011 and also against Bank Indonesia Regulation Number 17 of 2015.
“Regarding cryptocurrency law, there are three legal dictums from the deliberations. The use of it as legal currency is haram," said KH Asrorun Niam Sholeh as Chair of the MUI for Fatwa on Wednesday, November 11, 2011.
Regarding the illicit crypto fatwa, MUI itself argues that cryptocurrency is gharar which means uncertainty in transactions due to unfulfilled shari'a provisions in transactions. While the term dharar in this context means transactions that can cause damage or loss.
"Because it contains gharar, dharar and contradicts Law number 7 of 2011 and Bank Indonesia Regulation number 17 of 2015," he added.
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On the other hand, KH Asrorun also mentioned that crypto is an asset or commodity that meets the requirements as sil'ah and has underlying and has clear benefits that are legitimate to be traded. He explained that the sil'ah requirements in syar'i include the existence of a physical form, having value, knowing the exact amount, property rights, and can be handed over to the buyer as reported by Kompas.com.
"Cryptocurrency as a commodity or asset that meets the requirements as sil'ah and has an underlying and has clear benefits that are legitimate to be traded," he said.
Before the fatwa from the MUI, the East Java PWNU first established a haram fatwa for crypto. On the other hand, the Islamic organization Muhammadiyah has not yet issued a decision on whether crypto is halal or haram.
Based on Muhammadiyah's official website, Fahmi Salim as Deputy Chair of the Muhammadiyah Central Leadership Tablighi Council explained that in Islam itself there is no special fatwa that can be used as a reference for agreeing on crypto laws. Fahmi assesses that crypto has a fairly complicated level of novelty, this is why some scholars are not in a hurry to issue legal fatwas against crypto, including Muhammadiyah.
“This 'crypto' technology is actually value-free. If it is used to produce unlawful products or unlawful services, then the products are unlawful. If it is used to produce halal products, then the products can remain halal," said Fahmi Salim as quoted from the official website of Muhammadiyah.or.id.
However, apart from cryptocurrencies, new things in technology continue to emerge, including non-fungible token (NFT) digital arts, and recently the metaverse. Regarding this matter, it is not yet known whether MUI will issue a legal fatwa or not where the three things do not have a physical form.
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