Indonesian Islamic Body Bans Cryptocurrencies As Currency

Indonesia, the world’s largest Muslim-majority country, prohibits the use of cryptocurrencies as currency, but investment and trading of digital tokens are allowed in the commodity and futures market.
The total value of cryptocurrency Trading on the commodity exchange has reached 370 trillion rupees ($ 25.96 billion) this year through May, according to the Ministry of Commerce.

Total trade at the end of 2020 was valued at Rs 65 trillion. The number of merchants has reached 6.5 million compared to 4 million.

As a means of payment, cryptocurrencies are prohibited under Islamic law because they carry elements of uncertainty and harm, and violate state laws, Asrorun Niam Sholeh, head of religious decrees at MUI, told Reuters.

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Trading cryptocurrencies as a commodity is also illegal, and the MUI compares it to gambling, because it does not comply with Islamic rules, such as goods having a physical form, a clear value, and a known exact quantity, among other reasons. , he said.

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

The exchange of raw materials allows the trading of hundreds of cryptocurrencies that meet the security and good governance requirements of the blockchain system.

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

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