Is Bitcoin Haram in Sharia? A Methodological Critique of the Prohibition Fatwa

Essa Al-Mansouri

doi:10.51331/bemA06

Articles

Vol. 1 No. 2 (2025): Volume 1 - Issue 2 (May 2025)

Is Bitcoin Haram in Sharia? A Methodological Critique of the Prohibition Fatwa

Essa Al-Mansouri (Author) Hamad Bin Khalifa University https://orcid.org/0000-0003-0975-0820

DOI

https://doi.org/10.51331/bemA06

How to Cite

Is Bitcoin Haram in Sharia? A Methodological Critique of the Prohibition Fatwa. (2025). Journal of Balkan Economies and Management, 1(2), 83-156. https://doi.org/10.51331/bemA06

More Citation Formats
- ACM
- ACS
- APA
- ABNT
- Chicago
- Harvard
- IEEE
- MLA
- Turabian
- Vancouver
- AMA
- ISNAD Citation Style
RIS
BIBTEX
EndNote
Zotero
Mendeley

Abstract

This article critically evaluates the Sharia legitimacy of Bitcoin by applying Usul al-Fiqh—the foundational principles of Islamic jurisprudence—to several influential fatwas that prohibit it. Despite stemming from sincere concerns, many such fatwas rely on incomplete factual understanding, unverified analogies, or secondary policy considerations rather than explicit textual or consensus-based evidence. Consequently, these rulings risk conflating genuine harms (fraud, volatility, illicit use) with Bitcoin’s inherent characteristics, which classical fiqh frameworks may otherwise recognize as permissible if carefully regulated. Drawing on examples of fatwas that deem Bitcoin permissible, the study demonstrates how thorough subject comprehension and methodologically robust legal derivation (ijtihad) often yield more nuanced conclusions. It further underscores that well-established Qur’anic and Prophetic principles— such as avoiding excessive uncertainty (gharar) and upholding wealth preservation—need not preclude thoughtful, evidence-based engagement with emerging financial technologies. Concluding that clear methodological grounding and accurate technology assessment are indispensable, the paper advocates ongoing dialogue between Sharia scholars, economists, and technical experts to ensure balanced rulings
that protect Muslims’ interests while fostering innovation.

Keywords

Bitcoin, Islamic Finance, Cryptocurrencies, Sharia, Usul al-Fiqh, Fatwas, Halal, Haram

References

Abozaid, A. (2020). Does Shariah Recognize Cryptocurrencies as Valid Currencies? In N. Naifar (Ed.), Impact of Financial Technology (FinTech) on Islamic Finance and Financial Stability (pp. 174–191). IGI Global. https://doi.org/10.4018/978-1-7998-0039-2.ch009

Abu-Bakar, M. M. (2018). Shariah Analysis of Bitcoin, Cryptocurrency, and Blockchain. Blossom Labs, Inc., 14–19.

Al-Alwani, T. J., Al-Shaikh-Ali, A. S., & DeLorenzo, Y. T. (2003). Source Methodology in Islamic Jurisprudence: (Usul al-Fiqh al-Islami). International Institute of Islamic Thought (IIIT).

Al-Ejli, O. (2010). [Structure of the Economic System of the Abbasi Califpat] (1st ed.). Nahawand Media Centre.

Al-Farouqi, A. (2024). The Role of Maṣlaḥa (Public Interest) in Determining Fatwas on Cryptocurrency in Muslim-Majority Countries. Maqsha: Journal of Islamic Jurisprudence, 1(1), Article 1.

Ali, J. (2001). [The Detailed on the History of Arabs before Islam] (4th ed., 1–20). Dar Al-Saqi.

Aljamos, Y. M., Noor, A. M., Aswadi, M. S. M., & Baharuddin, A. S. (2022). The Blockchain Technology from Maqasid Shari’ah Perspective. Journal of Contemporary Maqasid Studies, 1(2), Article 2. https://doi.org/10.52100/jcms.v1i2.54

Allam, S. (2017). [Ruling on Bitcoin and Transacting with it] (Fatwa 4205). Egypt’s Dar Al-Ifta. https://www.dar-alifta.org/ar/fatwa/details/14139/%D8%AD%D9%83%D9%85-%D8%AA%D8%AF%D8%A7%D9%88%D9%84-%D8%B9%D9%85%D9%84%D8%A9-%D8%A7%D9%84%D8%A8%D9%8A%D8%AA%D9%83%D9%88%D9%8A%D9%86-%D9%88%D8%A7%D9%84%D8%AA%D8%B9%D8%A7%D9%85%D9%84-%D8%A8%D9%87%D8%A7

Allam, S. (2020). [Ruling on Daily Trading in a Stock Market] (Fatwa 5056). Egypt’s Dar Al-Ifta. https://www.dar-alifta.org/ar/fatwa/details/14139/%D8%AD%D9%83%D9%85-%D8%AA%D8%AF%D8%A7%D9%88%D9%84-%D8%B9%D9%85%D9%84%D8%A9-%D8%A7%D9%84%D8%A8%D9%8A%D8%AA%D9%83%D9%88%D9%8A%D9%86-%D9%88%D8%A7%D9%84%D8%AA%D8%B9%D8%A7%D9%85%D9%84-%D8%A8%D9%87%D8%A7

Al-Mansouri, E. H., Aysan, A. F., & Nagayev, R. (2025). Beyond the Buzz: A Measured Look at Bitcoin’s Viability as Money. Journal of Risk and Financial Management, 18(1), Article 1. https://doi.org/10.3390/jrfm18010039

Al-Milhim, S. (2008). [Gambling (Qimar) Its true nature and Sharia Rulings] (1st ed.). Dar Kunuz Eshbilia Publishing.

Alonso, S. L. N., Fernández, M. Á. E., Bas, D. S., & Rico, C. P. (2023). El Salvador: An analysis of the monetary integration law and the bitcoin law. Brazilian Journal of Political Economy, 44, 189–209. https://doi.org/10.1590/0101-31572024-3459

Al-Quradaghi, A. (2018). Fatwa on the Sharia ruling on Electronic Cryptocurrencies. Office of Prof Dr Ali Al-Quradaghi. https://iefpedia.com/arab/wp-content/uploads/2018/05/Bitcoin-ali.quradaghi.pdf

Al-Shehabi, O. (2023). [Indications of Preference for using “hate” to describe “Haram” in Imam Ahmed’s texts—An Usuli Study]. Journal of Sharia and Law Sector, 14(14). https://doi.org/10.21608/jssl.2023.288455

Al-Zuhaili, W. (2017). [Fiqh with its Evidential Sources] (12th ed., 1–10). Dar Al-Fikr.

Ammous, S. (2015). Economics beyond Financial Intermediation: Digital Currencies’ Possibilities for Growth, Poverty Alleviation, and International Development. Journal of Private Enterprise, 30(3), 19–50. ProQuest Central.

Ammous, S. (2018). The Bitcoin Standard: The Decentralized Alternative to Central Banking. Wiley.

Ammous, S. (Producer). (2023, August 22). 182. The Islamic Case For Bitcoin [Video recording]. https://www.youtube.com/watch?v=1-2ZMRvqGJY

Antonopoulos, A. M. (2017). Mastering Bitcoin: Programming the Open Blockchain. O’Reilly Media, Inc.

Anwar, C. J. (2023). Heterogeneity Effect of Central Bank Independence on Inflation in Developing Countries. Global Journal of Emerging Market Economies, 15(1), 38–52. https://doi.org/10.1177/09749101221082049

Auda, J. (2008). Maqasid Al-shariah as Philosophy of Islamic Law: A Systems Approach. International Institute of Islamic Thought (IIIT).

Aysan, A. F. (2025). The Rise in Cryptoasset Adoption in MENA and Latin America. In K. Tsanis, H. C. Webb, A. Kaddour, & O. David-West (Eds.), The Palgrave Handbook of FinTech in Africa and Middle East: Connecting the Dots of a Rapidly Emerging Ecosystem (pp. 1–11). Springer Nature. https://doi.org/10.1007/978-981-97-1998-3_18-1

Aysan, A. F., & Al-Saudi, H. A. (2023). Blockchain technology and the potential of waqf (Islamic endowment) sector revival. Journal of AI, Robotics & Workplace Automation, 2(4), 317–326.

Aysan, A. F., Demirtaş, H. B., & Saraç, M. (2021). The Ascent of Bitcoin: Bibliometric Analysis of Bitcoin Research. Journal of Risk and Financial Management, 14(9), Article 9. https://doi.org/10.3390/jrfm14090427

Balarabe, A., Abdullah, M. F., & Rahman, A. (2024). CRYPTOCURRENCY IN NIGERIA: A REVIEW FROM CONTEMPORARY ISLAMIC SCHOLARS’ PERSPECTIVE. Jurnal Syariah, 32(3), Article 3. https://doi.org/10.22452/syariah.vol32no3.5

Baudier, P., Kondrateva, G., & Ammi, C. (2023). Can blockchain enhance motivation to donate: The moderating impact of religion on donors’ behavior in the USA’s charity organizations. Technological Forecasting and Social Change, 191, 122524. https://doi.org/10.1016/j.techfore.2023.122524

Benston, G. J., & Smith, C. W. (1976). A Transactions Cost Approach to the Theory of Financial Intermediation. The Journal of Finance, 31(2), 215–231. https://doi.org/10.2307/2326596

Bhimani, A., Hausken, K., & Arif, S. (2022). Do national development factors affect cryptocurrency adoption? Technological Forecasting and Social Change, 181, 121739. https://doi.org/10.1016/j.techfore.2022.121739

Bouri, E., Shahzad, S. J. H., Roubaud, D., Kristoufek, L., & Lucey, B. (2020). Bitcoin, gold, and commodities as safe havens for stocks: New insight through wavelet analysis. The Quarterly Review of Economics and Finance, 77, 156–164. https://doi.org/10.1016/j.qref.2020.03.004

Conlon, T., Corbet, S., & McGee, R. J. (2020). Are cryptocurrencies a safe haven for equity markets? An international perspective from the COVID-19 pandemic. Research in International Business and Finance, 54, 101248. https://doi.org/10.1016/j.ribaf.2020.101248

Disli, M., Nagayev, R., Salim, K., Rizkiah, S. K., & Aysan, A. F. (2021). In search of safe haven assets during COVID-19 pandemic: An empirical analysis of different investor types. Research in International Business and Finance, 58. Scopus. https://doi.org/10.1016/j.ribaf.2021.101461

Dobb, M. (1975). Theories of Value and Distribution Since Adam Smith: Ideology and Economic Theory. Cambridge University Press.

Farhan, M. F., & Saiban, K. (2024). VALIDITY OF CRYPTOCURRENCY AS DOWRY IN MARRIAGE IN INDONESIA PERSPECTIVE OF ISLAMIC LAW. Hukum Islam, 24(2), Article 2. https://doi.org/10.24014/hi.v24i2.23527

Ghoni, M. A., Syafei, A. W., & Ariza, K. (2022). The application of islamic legal maxim of blocking evils is precedenced than taking benefits in cryptocurrency market: Evidence from Treynor and Jensen method. Al-Tasyree: Jurnal Bisnis, Keuangan Dan Ekonomi Syariah, 2(1), Article 1.

Graeber, D. (2014). Debt: The First 5,000 Years,Updated and Expanded. Melville House.

Hamdan, A.-K. (1988). [Origins of the Coinage System in the Arab and Islamic Country] (1st ed.). Dar Al Suun Al Thakafia.

Hassan, M. K., Muneeza, A., & Mohamed, I. (2023). Cryptocurrencies from Islamic perspective. Journal of Islamic Accounting and Business Research, 16(2), 390–410. https://doi.org/10.1108/JIABR-09-2022-0238

Hazard, J., Sclavounis, O., & Stieber, H. (2016). Are Transaction Costs Drivers of Financial Institutions? Contracts Made in Heaven, Hell, and the Cloud in Between. In P. Tasca, T. Aste, L. Pelizzon, & N. Perony (Eds.), Banking Beyond Banks and Money: A Guide to Banking Services in the Twenty-First Century (pp. 213–237). Springer International Publishing. https://doi.org/10.1007/978-3-319-42448-4_12

Hidayat, A. S. (2023). Sharia and State’s Intervention: Uncertainty Cryptocurrency in Indonesia. AHKAM : Jurnal Ilmu Syariah, 23(1), Article 1. https://journal.uinjkt.ac.id/index.php/ahkam/article/view/31876

High Board of Religious Affairs. (2017). Kripto paraların kullanımının dini hükmü nedir? : Din İşleri Yüksek Kurulu: Dini Bilgilendirme Platformu [What is the religious ruling on the use of cryptocurrencies?]. President of the Religious Affairs. https://kurul.diyanet.gov.tr/Cevap-Ara/1375/kripto-paralarin-kullaniminin-dini-hukmu-nedir

Hossain, M. S. (2021). What do we know about cryptocurrency? Past, present, future. China Finance Review International, 11(4), 552–572. https://doi.org/10.1108/CFRI-03-2020-0026

Husam El-Deen, M. (2018). [Compensating for Abstract Rights in Sharia: A Comparative Study with Positive Laws and Contemporary Applications] (1st ed.). Hasan Modern Library.

Ibn Al-Qayyim, al-J. (2019). I’laam al-Mouwaqi’in ’an Rabb il-’Alamin [Notice to those Who Sign on Behalf of the God of All Worlds] (M. Al-Islahi, Trans.; 2nd ed., 1–6). Dar Ibn Al-Jawzi. https://www.sifatusafwa.com/en/usool-al-fiqh/i-laam-al-mouwaqi-in-ibn-qayyim-al-jawziya-100-harakat.html

Ibrahim, N. M., Paradasa, F. K., Jafri, F. A., & Noordin, M. F. (2024). EVALUATING CRYPTOCURRENCIES THROUGH THE LENS OF ISLAMIC FINANCE BASED ON MAQASID SHARIAH. Journal of Information Systems and Digital Technologies, 6(2), Article 2. https://doi.org/10.31436/jisdt.v6i2.504

IIFA. (1986). Shariah Rulings on Paper Money and the Changing Value of Currency (Resolution No. 21 (9/3)). International Islamic Fiqh Academy - Organization of Islamic Cooperation. https://iifa-aifi.org/en/32270.html

IIFA. (1988). [Resolution on Intangible Rights] (Resolution 43 (5/5)). International Islamic Fiqh Academy - Organization of Islamic Cooperation. https://iifa-aifi.org/ar/1757.html

IIFA. (1990). Financial Markets (Resolution No. 59 (10/6)). International Islamic Fiqh Academy - Organization of Islamic Cooperation. https://iifa-aifi.org/en/32424.html

IIFA. (1992). Financial Markets (Shares, Options, Commodities, and Credit Cards) (Resolution No. 63 (1/7)). International Islamic Fiqh Academy - Organization of Islamic Cooperation. https://iifa-aifi.org/en/32438.html

IIFA. (2019). Electronic Currencies (Resolution No. 237 (8/24); The Twenty-Fourth Session). International Islamic Fiqh Academy - Organization of Islamic Cooperation. https://iifa-aifi.org/en/33163.html

IMF Staff. (2022). El Salvador: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for El Salvador (Country Report No. 2022/020, p. 114). IMF. https://www.imf.org/en/Publications/CR/Issues/2022/01/26/El-Salvador-2021-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-512245

Ingham, G. (2013). The Nature of Money. John Wiley & Sons.

IUMS Fatwa & Ijtihad Committee. (2022). [On Transacting with Bitcoin and Cryptocurrencies] (Resolution No. 1 of Year 1444 (hijri)). International Union of Muslim Scholars (IUMS). https://iums.me/26607

Kamali, M. H. (2003). Principles of Islamic Jurisprudence (3rd ed.). Islamic Texts Society.

Kamis, N. S., Isa, M. M., & Noor, N. S. M. (2022). CAN MUSLIM INHERIT BITCOIN? DISCOVERING THE CONTINUITY OF DIGITAL ASSET IN PERLIS. International Journal of Islamic Business, 7(2), Article 2. https://doi.org/10.32890/ijib2022.7.2.3

Kazemi-Moussavi, A., & Mavani, H. (2023). Islamic Legal Methodology: A New Perspective On Uşŭl Al-Fiqh. International Institute of Islamic Thought (IIIT).

Kim, T. (2017). On the transaction cost of Bitcoin. Finance Research Letters, 23, 300–305. https://doi.org/10.1016/j.frl.2017.07.014

Kirchner, I. K. F. (2020). Are Cryptocurrencies ḥalāl? On the Sharia-Compliancy of Blockchain-Based Fintech. https://doi.org/10.1163/15685195-BJA10005

Koddenbrock, K. (2019). Money and moneyness: Thoughts on the nature and distributional power of the ‘backbone’ of capitalist political economy. Journal of Cultural Economy, 12(2), 101–118. https://doi.org/10.1080/17530350.2018.1545684

Lal, A., Zhu, J., & You, F. (2023). From Mining to Mitigation: How Bitcoin Can Support Renewable Energy Development and Climate Action. ACS Sustainable Chemistry & Engineering, 11(45), 16330–16340. https://doi.org/10.1021/acssuschemeng.3c05445

Mawardi, A. H. A. (2017). Al Ahkam As Sultaniyyah—Al Mawardi. Repro Knowledgcast Limited.

Meera, A. K. M. (2018). Cryptocurrencies From Islamic Perspectives: The Case Of Bitcoin. Bulletin of Monetary Economics and Banking, 20(4), 475–492. https://doi.org/10.21098/bemp.v20i4.902

MUI. (2021). [Fatwa on Cryptocurrency] (Fatwa VII Fatwa Commission Scholars’ Congress). Majelis Ulama Indonesia. https://fatwamui.com/storage/540/HUKUM-CRYPTOCURRENCY.pdf

Mustafa, M. T. (2023). Analysis of Online Media Stance toward Mui’s Decision Regarding the Halal-Haram of Cryptocurrencies. International Journal of Health, Education & Social (IJHES), 6(7), Article 7. https://doi.org/10.1234/ijhes.v6i6.309

N. M. Ibrahim, M. Abu Bakar, S. S. Abdul Rahman, & M. Amrullah DRS Nasrul. (2024). Cryptocurrency as Digital Asset According to the Principles of Usul al-Fiqh: A Critical Analysis by Mohd Daud Bakar. 2024 3rd International Conference on Creative Communication and Innovative Technology (ICCIT), 1–6. https://doi.org/10.1109/ICCIT62134.2024.10701114

Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system.

Naya, A., Fadillah, P., Diniyah, D. S., Nuha, D. A., & Triyawan, A. (2024). Analysis of Cryptocurrency Law in Economic and Sharia Perspectives. Proceeding of ICoPIS, 1(1), Article 1.

Noh, M. S. M. (2022). The Fiqhi Thought of Price Volatility in Crypto Asset. Jurnal Fiqh, 19(1), Article 1. https://doi.org/10.22452/fiqh.vol19no1.2

Othman, R., Noordin, M. F., Ahmed, M., Ahmad, N., & Kassim, S. (2023). Muslim Scholars and Experts Views on Cryptocurrencies: A Systematic Literature Review: Pandangan Sarjana dan Pakar Muslim tentang Matawang Kripto: Satu Kajian Literatur Sistematik. Sains Insani, 8(1), Article 1. https://doi.org/10.33102/sainsinsani.vol8no1.455

Rani, M. A. H. C., Kamalulai, M. J., & Awang, A. (2024). Exploring the Impact of Bitcoin as a New form of Property on the Maqasid Shariah: Maslahah and Mafsadah Perspective. International Journal of Academic Research in Business and Social Sciences, 14(11), 717–727.

Rosele, M. I., Muneem, A., Ali, A. K., Seman, A. C., Abdullah, L. H., Rahman, N. N. A., & Sukor, M. E. A. (2025). A proposed zakat model for digital assets from the Shariah perspective. International Journal of Islamic and Middle Eastern Finance and Management, ahead-of-print(ahead-of-print). https://doi.org/10.1108/IMEFM-08-2024-0408

SAC. (2020). Digital Assets from Shariah Perspective (Resolution The 233rd and 234th Meeting). Shariah Advisory Council of the Securities Commission Malaysia. https://www.sc.com.my/development/icm/shariah/resolutions-of-the-shariah-advisory-council-of-the-sc

Sahalan, O., & Samsudin, M. A. (2023). Cryptocurrency According to The Principles of Usul al-Fiqh: A Critical Analysis by Mohd Daud Bakar. Islamiyyat, 45(1), 37–46. ProQuest One Academic. https://doi.org/10.17576/islamiyyat-2023-4501-04

Secretaría de Prensa. (2021, October 11). La estrategia del Gobierno del Presidente Nayib Bukele con la inversión en bitcóin muestra las posibilidades para diversificar fuentes de recursos en beneficio de todos. Presidencia de la República de El Salvador. https://www.presidencia.gob.sv/la-estrategia-del-gobierno-del-presidente-nayib-bukele-con-la-inversion-en-bitcoin-muestra-las-posibilidades-para-diversificar-fuentes-de-recursos-en-beneficio-de-todos/

Supreme Iftaa Council. (2017). [Sharia Ruling on Transacting with the electronic currency called (Bitcoin) and the ruling on mining it] (Decision 1/158). Dar Al-Ifta Al-Falasteeniyya. https://www.darifta.ps/majles2014/showfile/show.php?id=269

Treiblmaier, H. (2022). Do cryptocurrencies really have (no) intrinsic value? Electronic Markets, 32(3), 1749–1758. https://doi.org/10.1007/s12525-021-00491-2

Von Mises, L. (2013). The theory of money and credit. Skyhorse Publishing, Inc.

Wray, L. R. (2015). Modern money theory. Springer.

Zimmerman, M. J., & Bradley, B. (2019). Intrinsic vs. Extrinsic Value. In E. N. Zalta (Ed.), The Stanford Encyclopedia of Philosophy (Spring 2019). Metaphysics Research Lab, Stanford University. https://plato.stanford.edu/archives/spr2019/entries/value-intrinsic-extrinsic/

There are 78 references in total. Show More References

License