Indonesia’s top Islamic body forbids use of crypto as currency

Photo by Andre Francois on Unsplash

The Indonesian Ulema Council (MUI), a top body of clerics, has ruled that using cryptocurrencies as a means of payment is unlawful in Islam, but trading of digital assets could be allowed, one of its leaders said on Thursday.

Indonesia, the world’s biggest Muslim majority country, bans the use of crypto as a currency, but investment in and trading of digital tokens are allowed in the commodities and futures market.

The total value of cryptocurrency trading in the commodity bourse has reached 370 trillion rupiah ($25.96 billion) this year to May, according to the trade ministry.

The total trading at the end of 2020 was valued at 65 trillion rupiah. The number of traders has reached 6.5 million up from 4 million.

As a means of payment, cryptocurrencies are forbidden according to Shariah law because they carry elements of uncertainty and harm, and are in violation of state laws, Asrorun Niam Sholeh, the MUI’s head of religious decrees, told Reuters.

Trading of cryptocurrencies as a commodity is also unlawful, with the MUI likening it to gambling because it does not meet Islamic rules, such as for the goods to have a physical form, a clear value, and a known exact amount, among other reasons, he said.

However, the MUI allows trading of cryptocurrencies that meet Islamic rules, have an underlying asset and carry clear benefits, Asrorun said.

The commodities exchange allows the trading of hundreds of cryptocurrencies that meet the requirements of safety and good governance of the blockchain system.

The MUI’s decree is not legally binding as it is not part of the government, but its ruling may affect investment decisions by some Muslims.

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.