DIGITAL CURRENCY (CRYPTOCURRENCY) ACCORDING TO ISLAMIC PERSPECTIVE

Abstract

This study aims to determine the role of Digital Currency according to Islam. According to the legal instructions of Islam, digital currency lacks properties like that of a physical or financial asset such as Gold or Local Currency backed up by a country’s government. Now that the world is progressing towards digitalization, Governments and International businesses have started to experience and work with Digital Currencies, which needs an Islamic perspective as physical currency has started to transform into Digital Currency. Centralized form of currency like banks are old compared to Decentralized currency and trade which is new and has its own pros and cons. Currency in historical background of Islam has always been a physical medium of exchange having a source of value. Similarly, Mal is something that can be stored for the time of necessity or utilized for humanity, Mal in the form of a metal has transformed into Cash backed up by precious metals considered as assets in this modern age which is according to the teachings of Quran and Islamic law. Digital Currency in the History of Islam is new and does not meet the requirements of “currency” in Islam due to which Scholars has declared it Haram according to the rules of Shariah. Digital Currency being Haram is still up for debate as some Scholars have declared it Halal in some cases with strict conditions in light of Islamic Laws. Digital Currency in Islam remains an issue of debate.