A recent statement by a specialist in the theology of Islam that bitcoin conforms to Sharia law, could be one reason for yesterday’s growth of bitcoin in the thousands of dollars, as it opened up the market to Muslim investors who previously were not sure that bitcoin qualifies as money in the Islamic doctrine.
Muslims make up about 23% of the world population there are about 1.6 billion people, mostly in the Asia-Pacific region such as India and Indonesia. Sharia law or Islamic canonical law, forbids usury — the practice of borrowing money at high interest rates. Since bitcoin became popular, discussion on the topic of whether it is a form of usury because of its high volatility, high profits and marginal losses did not abate among experts on Islam.
According to Islamic teachings, commodities with intrinsic value such as gold, silver, salt, considered to be currency. While paper or digital money are considered as currency only in cases when they provided goods with an intrinsic value and are exchanged at a fixed rate. For example, currency, backed by gold, in accordance with Sharia law.
In this respect, the situation with bitcoin was ambiguous, as it is both a commodity and currency. However, he still falls under the definition of money in the Shariah law, because according to them, all of that becomes widely accepted as currency by the company or by the government, is considered currency.
Mufti Muhammad Abu Bakar (Muhammad Abu Bakar), Advisor on issues of Sharia law and the observance of laws in the Blossom Finance in Jakarta, and published an article about whether bitcoin is Halal (allowed) or most welcome (prohibited) on Tuesday April 10. The document said that in some cases bitcoin can actually be Halal. The expert says:
«In Germany, bitcoin is legally recognized as a currency and therefore qualifies as Islamic funds in Germany. In countries such as the USA, bitcoin has no formal legal monetary status, but is accepted at different merchants and, therefore, qualifies as Islamic money».
The Sharia clearly described ideas about the preservation of wealth, which led to the fact that ICO and volatile market of crypto-currencies seen in a negative light. However, bitcoin and blockchain technology meet the ideas of Sharia. Because the blockchain conclusively proves the right of ownership, it is more in line with Sharia than banking, the article says Mufti Muhammad Abu Bakar.
Since almost every fourth inhabitant of the earth adheres to Islam, this statement can open the market to many investors who previously shunned investment for religious reasons. It is now widely spread opinion that yesterday’s surge in bitcoin prices is partly responsible investors-Muslims. However, it is hardly the case. This event could serve as a pretext for large bulls go into another attack, as the fall in bitcoin in recent weeks has continued to slow, and the rebound expected by many.