THE world’s top Islamic finance scholars are scrutinising the validity of cryptocurrencies, as debate grows in the industry as to whether they can be deemed sharia compliant.
The issue of religious permissibility could help determine whether Islamic financial firms can invest in cryptocurrencies, widening their appeal in the industry’s main centres in the Gulf and South-east Asia.
The discussions were part of the annual sharia conference of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) held in Bahrain recently.
The key question is whether cryptocurrencies fall under the so-called “ribawi” category, which includes commodities like gold and silver. Ribawi items must be exchanged in equal measure and with immediate transfer of possession, otherwise transactions may involve riba (usury/interest), a major prohibition in Islam.
Scholar deliberations, however, could clarify what types of cryptocurrencies are religiously acceptable and influence future product development. — Reuters
Dr. Bilal Philips