Is there a distinction between halal and non-halal in digital currency?
As the development of cryptocurrencies and blockchains swept the world, the Islamic world, the world's fastest-growing religious world, was also "invaded" by cryptocurrencies.
But according to its Islamic law based on the teachings of the Qur'an, Muslims have a taboo similar to the “food world” in the financial world: in Islam, the process of usury, the process of obtaining interest through loans, is considered It is sinful.
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Prior to this, the appreciation of real-life support assets such as real estate or gold was in accordance with Islamic law, but most cryptocurrencies were considered illegal because they did not have physical asset support and usually represented a pseudo-investment in the company.
But recently, the famous Muslim scholar and financial adviser Amanie published a white paper announcing that Ethereum is “halal” according to Islamic law. For Muslim buyers, this clarity may stimulate the Ethereum. Additional needs.
"Halal Certification" Ethereum
Muslim scholar Amanie judged ETH as “halal” because ETH represents a “functional token” and serves as a currency for the Ethereum network. Therefore, it is legal to have ETH. However, he also has reservations about the specific use cases of ETH because there are many other tokens running on the agreement. In some cases, if the token is used to raise funds for the company (which looks a lot like interest), then this behavior is considered illegal in Islam.
More subtly, although he ruled that Ethereum's PoW mechanism and PoS mechanism are in line with Islamic law. However, once ETH 2.0 goes live, the act of “locking” tokens to obtain pledge rewards remains a controversial issue.
But at least he still expressed a positive attitude towards ETH. Amanie is a highly respected figure in the Islamic financial community. Although this view is not final, it is still very weighty among devout Muslims.
According to the Pew Research Center, Islam is the fastest growing religion in the world. There are about 1.6 billion Muslims in the world, accounting for about 23% of the world's population. Most Muslims in the world live in the Asia-Pacific region of countries such as Indonesia and India. Given its large audience of believers, this white paper is likely to have a substantial impact on the demand for ETH.
Who is more "halal" for BTC and ETH?
In fact, the controversy over whether the two major digital currencies, Bitcoin and Ethereum, are in conformity with Islamic law has been particularly prominent.
Virgil Griffith, a US program and special project leader for the Ethereum Foundation, first studied the issue in October 2017.
He cites the definition of "money" in Islamic law: (1) as an exchange medium; (2) money is durable and does not destroy or corrode; (3) money is precious metal or food; (4) money The ownership of the assets is clear and endowed with valuable value by God; (5) the funds are abundant and freely available; and (6) the money has intrinsic value.
He believes that both Bitcoin and Ethereum meet the top five. In the sixth article, Ethereum is more halal than Bitcoin. The reason is that Bitcoin's POW mechanism does not give its value, only exists as an exchange medium; but ether. Because of the existence of smart contracts, the square has the intrinsic value of driving diverse programs compared to the former.
It turns out that Virgil Griffith has also been rushing for his arguments. In July, according to Coindesk, Virgil Griffith said the organization is working with financial experts along the Gulf Coast to prove that the Ethereum blockchain is in compliance with Islamic law.
Is that bitcoin halal?
Cointelegraph interviewed Matthew J. Martin, a financial technology startup from Indonesia.
Matthew is a Muslim American from Indonesia who believes that Bitcoin can be divided into currency and payment networks, and the Sharia principles apply to both.
He believes Bitcoin as a payment network, "is halal. Bitcoin goes beyond the traditional closed banking network. The traditional banking network uses private ledgers. There is no guarantee that the promoters actually own the relevant assets, while the bitcoin is mathematically. The certainty guarantees that the originator of the transfer has the relevant assets, and the traditional banks operate on the principle of partial reserves, which is prohibited in Islam."
Bitcoin may be more halal than modern legal tender. He said, "Modern sovereign currency is based on debt and usury, which is strictly prohibited in Islam; on the other hand, bitcoin is not based on debt – it is based on work proof – and this is at least not illegal."
But as a currency, Bitcoin is not "halished". He says. “In history, Islam only recognizes goods with intrinsic value as currency, including gold, silver, rice, dates, wheat, barley, and salt. In a strict sense, bitcoin may not meet the currency standard.”
Source: Planet Daily