Muftī Muhammad Abu Bakar on the Permissibility of Cryptocurrency (2019)

In this paper, Muftī Muhammad Abu Bakar determines that cryptocurrency is permissible under Islamic law in principle as it is treated as a good with value, as evidenced by its high market price on global exchanges and its acceptance as a form of payment at a wide variety of global merchants. He further notes that the permissibility of cryptocurrency is determined by its classification as currency in a governing legal and regulatory environment. Where jurisdictions prohibit dealing with cryptocurrency, its usage is prohibited in Islamic law as well. Muftī Abu Bakar adds that, before trading with cryptocurrency, users must consider its volatility and associated risks, given that preservation of wealth is one of the fundamental objectives (maqāṣid al-sharīʿa) of Islamic law. He concludes that, overall, it is not advisable to buy cryptocurrency for investment purposes, but to utilize it as a system of payment instead. 

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