December 3, 2022 • 21 mins
► https://linktr.ee/practicalislamicfinance
Thanks for watching our video: Are all cryptos haram? - A rebuttal of the International Union of Muslim Scholars
The International Union of Muslim Scholars recently released an opinion that cryptocurrency is haram.
I've reviewed their opinion and shared in this video why I think they're dead wrong!
None of the arguments cited by the international union of Muslim scholars for the prohibition of cryptocurrencies in Islam can stand the test of critical interrogation.
I encourage viewers who see a flaw in my reasoning or those who agree to leave a comment.
--------------------------------------------------------------
CONTACT US
salam@practicalislamicfinance.com
ABOUT OUR CHANNEL
Our channel is about helping people invest to build wealth in a halal way. We cover topics such as halal crypto investing, halal stock investing, and halal product reviews.
DISCLAIMER
Anything you hear in this video is an opinion. It is not personalized financial advice. Make sure you do your own due diligence before making any investment decisions.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
as Salam Malko, theInternational Union of Muslim
Scholars recently released anopinion stating that Bitcoin and
cryptocurrencies are prohibited.
They give six reasons for theirdecision, and I'm about to
review each of these six reasonsand tell you why I think they
are dead wrong.
First, what did they say?
The opinion says it isprohibited to deal with Bitcoin
(00:21):
and other unofficialcryptocurrencies in their
current condition.
Trade them or manufacture.
For the following reasons.
Now, by unofficialcryptocurrencies, they are
referring to cryptocurrenciesthat are not issued by a
government.
So in case a government doesdecide to issue cryptocurrencies
in the future, they are inpassing judgment on that.
It's important to note thatthere are many cryptocurrencies,
(00:43):
thousands of them that meet thedefinition of unofficial
cryptocurrency.
The language of this opiniondoesn't seem to distinguish
between them.
It includes all of themregardless of their category,
utility payments, security,stable coin, defi, nft, asset
backed.
All of these cryptocurrenciesseem to be included by this
(01:06):
opinion.
This was the first red flag forme.
It makes sense that differentutilities of various
cryptocurrencies.
Different definingcharacteristics should bring
about different opinions ontheir permissibility.
I find this lack of nuance inthis recent opinion, quite
unbefitting.
For a body that claims the loftyname of the international union
(01:30):
of Muslim scholars, if I'm goingto be even blunter, this lack of
nuance is irresponsible.
There are a large number ofpeople that care about what this
union has to say, so they shouldchoose their words very.
Most people who read thisopinion think the opinion
relates to all cryptocurrenciesregardless of their utility.
(01:50):
Yet the opinion itself seems tobe referring.
When you look at the reasoning,it seems to be referring to
Bitcoin and Bitcoin likecryptocurrencies that are used
to make payments and transfervalue.
Now we at Practical IslamicFinance will continue to take
the time to analyze eachindividual crypto for what it is
based.
(02:11):
Its own merits in order todetermine our comfort level,
investing from a Halalperspective, and you can access
our list of reviewedcryptocurrencies for free on
practical islamic finance.com orusing the link in the
description.
Now, continuing with the text ofthis opinion, the first reason
for prohibition, which they citesays the following, the pillars
(02:34):
of currency and the conditionsof money are not met according
to.
Economists and others, and thepillars of money and currencies
are to be a means of measurementand a medium between other funds
so that the funds are estimatedby them and that there is no
purpose in their own objects,and that their ratio to other
funds is one ratio.
There is none of this in Bitcoinand similar digital currencies,
(02:57):
and therefore it is not a realcurrency.
Well, let's assume what they aresaying regarding Bitcoin and
similar cryptos not meeting therequired conditions of currency
and.
Is in fact true for argument'ssake.
We'll assume this is true.
Who said the only things thatMuslims are allowed to deal with
trade in and manufacture areforms of money or currency?
(03:19):
Fruits and vegetables are notforms of money.
Services are not money.
Oil and gas are not money yet.
These are all things that aMuslim is allowed to deal with,
trade in and manufacture.
So how does claimingcryptocurrencies are not money
validate in any.
The opinion that they should beprohibited for Muslims to deal
with.
This would be like when carsfirst came out, the authors of
(03:41):
this opinion coming together andsaying, well, we've reviewed the
characteristics of cars and haveconcluded that because cars
don't have hearts, tongues,tales, and many other parts,
they do not meet the definitionof a horse.
Therefore, Muslims are notallowed to deal with tradein or
manufacture cars.
If you say dealing with X isprohibited in Islam because it
(04:02):
does not meet the definition ofmoney, you are implying that the
only thing Islam allows you todeal with are forms of money.
This is a false implication.
So the first reason in thisopinion can be.
Very comfortably tossed out forbeing completely irrelevant to
prohibition.
The second reason that they citeis that cryptocurrencies and
Bitcoin has none of thefunctions of money and
(04:24):
currencies, the most importantof which are being a general
medium of exchange, a measure ofvalue, a store of wealth, and a
standard for future payments ofdebts.
Bitcoin and other similardigital currencies do not
perform.
Any of these functions?
Well, I have to admit, it's kindof hard to distinguish between
the first and second reasonshere.
They do seem largely redundant.
(04:45):
If I'm being generous, I'll saythe second reason is saying that
not only are cryptocurrency notvalid forms of money or
currency, but they're alsounable to fulfill any of the
functions of money and currency.
So from this, we're supposed tomake the rather acrobatic jump
in logic to say, this is areason why Muslims are not
allowed to deal with trade-in ormanufac.
(05:07):
Sorry, this is not validreasoning for prohibition in
Islam.
Valid reasoning for prohibitionin Islam is to say a Los says
the prophet piece upon him saidSo and so is har, and this new
thing is really similar to thatthing.
Which we know to be Hi, andtherefore this new thing is hi,
and there hasn't been any ofthis so far, so let's keep going
(05:29):
because believe it or not, itactually gets worse.
The third reason that ismentioned is that
cryptocurrencies are not goodsbecause they are meant to be
exchanged and not intended forthemselves.
As our goods, nor are theyfinancial assets.
There are not any type of assetin kind assets services or
something similar and cannot beconsidered as shares.
(05:49):
Cash holding intrinsic value, aright or a benefit.
This argument is basicallysaying we're trying to fit
cryptocurrency.
Into a bucket that we'refamiliar with, and it's not
really fitting neatly into anyof these buckets.
And since it isn't like anythingwe're familiar with, we're just
gonna say it is prohibited.
This is the exact opposite ofthe Islamic approach.
(06:12):
This is because an Islam, thedefault for everything is
permissibility, with exceptionto rituals of worship, of
course.
Therefore, the proper sequencehere is to start with the list
of things that are prohibit.
In Islam and to see ifcryptocurrencies are like any of
these prohibited things.
And if it isn't and it doesn'thave the same impact as any of
(06:33):
these prohibited things, thenthe matter in question is
permissible.
The opinion fails to say whichprohibited category
cryptocurrencies fall in.
It is completely un-Islamic tosay because we aren't able to
categorize crypto into somethingwe are familiar with.
It is therefore, This is not howprohibition in Islam works, as
(06:54):
I've shown it is in fact theopposite of how Prohibition
works.
Now, putting this erroneousapproach aside that claims they
made about cryptocurrencies arefalse, cryptocurrencies are a
type of asset.
Namely a digital asset.
The definition of an asset issomething that is either useful
(07:14):
or valuable.
One can have legitimatearguments about the usefulness
of various cryptocurrencies, andindeed, I will submit that many
of the cryptocurrencies that areout there today, and perhaps a
majority of them, arecompletely.
There is no real usefulness inthem.
However, I would consider someof them to be quite useful.
(07:35):
Consider Bitcoin users using theBitcoin network can transfer
value through the Bitcoinnetwork to anyone on the planet
in any amount, at any time, justas easily.
As they send a person email, Ithink that's useful.
However, usefulness aside, whatyou cannot really argue with is
the fact that thesecryptocurrencies definitely have
(07:57):
value, as is evidence by thefact that their prices readily
verifiable at any point in time.
And often there exists a highlyliquid market.
For holders to realize thisprice at any time.
This is certainly true forBitcoin and it's true for many
other cryptocurrencies.
If you have any doubt thatBitcoin is an asset, just ask
yourself, who has the higher networth all else being equal?
(08:20):
Someone with no Bitcoin orsomeone with 10?
Which of the two would yourather be?
Of course, the Bitcoin holder.
Has a higher net worth andtherefore Bitcoin is an asset.
That said, as I mentioned, thisis in my mind, the less
important of the two points Imade.
The more important point is thattheir entire approach is
backward.
Whether or not Bitcoin is likesome other category that we're
(08:44):
familiar with.
Is irrelevant to the question ofwhether or not it should be
prohibited.
The relevant question is to ask,is Bitcoin like something that
we know is prohibited?
That would be a good reason tosay it is prohibited, but this
question wasn't even asked.
What matters is.
Whether or not Bitcoin and othercryptos meet the definition of
(09:05):
something that has beenprohibited by a lost power
dialogue or his messenger piecebe upon him, and this argument
has yet to be made.
The fourth reason for theopinions prohibition of Bitcoin
and crypto curr is that Bitcoinand similar digital currencies
do not represent any real.
Nor are they issued by theguarantee of a state that
(09:28):
approves them or a central bankthat guarantees them and for
money.
It is a necessary condition thatit is guaranteed in value by the
one who issues it for centuries.
Jus have been aware of thedangers of this deed limiting
the right to mint money to theduties of the state and the
(09:49):
Salton Iam.
Ahed May a law.
Mercy on him said it is notappropriate to strike Dhes
except with the permission ofthe Salton.
And this was in the book, UL andAra may aah have mercy on him,
said it is disliked for thesubjects to strike the Dhes even
(10:10):
if they are pure, because it isthe matter of the em.
Now, as for existence, Bitcoinand digital currencies are just
as.
And just as existent as anyother software.
If the website of theInternational Union of Muslim
scholars is real, then Bitcoinand other cryptocurrencies are
(10:32):
real as well as for being issuedby a guarantor or state.
In no instance is this mentionedas a requirement in either of
these sources of truth in Islam,which is Lass book or the son
of.
A profit piece be upon him.
Citing what Iam Ahed said morethan a thousand years ago is
(10:55):
wrong, and it's embarrassing.
To be honest, it's wrong becauseIam Ahmed lived in a very
different time that didn't havethe technologies we have today,
such as the internet and block.
And what is possible today, hemay have never even imagined.
It is reasonable to suspect thathis opinion may have been very
(11:17):
different if he had beensurrounded by the technologies
we have at our disposal today.
It's embarrassing because I, edwas not divine.
He was not divinely guided, andyet he is being cited more than
a thousand years after his.
As if his opinion is a proof ofsomething, the fact that we are
looking to Imam Ahed or then athousand years after his death
(11:40):
for guidance on a matter asmodern as blockchain and
cryptocurrency suggests, and I'mgonna be blunt here,
intellectual laziness.
Rather than coming up with freshideas that are appropriate for
the context in which we live,we're relying on the opinions of
a man who has been dead for morethan a thousand years, was not
divine or divinely guided andlived in a much different time
(12:03):
and context.
And I'd like to think that ifIam Ahed was alive today, he
would probably agree with me.
Most people don't agree withthemselves from 10 years ago, so
it's more than likely that ifIam Ahmed were alive today, he
would not agree with all theopinions he had a thousand years
ago.
Yet some of us still insist onclinging onto them and citing
them as if they were revelation.
(12:24):
It's no coincidence that you cantrace the decline of the Umma
and it's.
Stop leadership to around thetime.
Many of these books that wecontinuously cite today stopped
being written.
Finally, the necessity of statebacked or state issued or state
guaranteed currency has beenempirically proven to be false.
(12:46):
The only thing that matters forthe value of.
Is that it maintains theconfidence of its users.
Whether or not the issuedcurrency is backed by a state
will not save its value if itloses the trust of its users.
Look at the Lebanese Lara hasthe full support and backing of
the Lebanese government.
But the Lebanese people don'ttrust its value as is evidenced
(13:08):
by its price compared to prettymuch anything else.
And as is evidence by thepopularity of Bitcoin in
Lebanon, they trust Bitcoin.
A lot of Lebanese do trustBitcoin a lot more than they
trust the Lebanese Lara.
Look at Zimbabwe.
It has the full backing endsupport of the Zimbabwe
government, and yet it isapproaching zero almost because
(13:29):
the people lost their trust init.
So the source cited for this.
Is out of context and moreimportantly, the claim is
empirically false.
Next, dealing with Bitcoin andsimilar digital currencies and
their circulation does notachieve any significant benefit
for Muslims nor for theircountries, neither in industry,
(13:49):
in technologies, or in realtrade.
It's circulation and dealingwith it is contrary to the
purpose.
Of Sharia and money withoutnaming what those purposes are.
First of all, you are notallowed to prohibit a technology
because you don't see itspotential.
This is what caused some Muslimscholars to strongly oppose the
printing press when it firstcame out.
(14:11):
According to some sources, theprohibition was so serious that
at one point it was punishableby death.
This prohibition or negativeview towards printing presses
persisted for near.
300 years, and I think it'sreasonable to believe that this
prohibition contributed in someway to Muslims falling behind
other nations in scientificscholarship.
(14:32):
This prohibition was all madepossible because it did not rely
on anything that a lost poundDallas says, or the prophet
piece be upon him, said rather.
A few vocal voices were giventoo much weight and these voices
failed to see the potential ofthis new technology.
We should make sure not to makethis same mistake again.
Second, the benefits of somecryptocurrencies are already
(14:55):
demonstrably real.
For example, consider atransaction cost.
It's not uncommon for a domesticmoney wire transfer to cost 25
to$30 at least here in theUnited States, sending money
internationally can be even moreexpensive.
Compare this cost with$16million worth of do coin being
(15:15):
transferred earlier this yearfor.
Less than$1.
This reduction in transactioncosts is a very real benefit
that makes it easier for peopleto do business with one another
globally.
Not to mention there is notelling how the benefits of
cryptocurrencies evolve in thefuture.
Third, the opinion contradictsitself.
(15:36):
And proves that cryptocurrenciesare useful when it says later in
the opinion that the committeeexcludes cases of necessity and
urgent need from the prohibitionof dealing with Bitcoin and
digital currencies, such ashelping Muslims who are
economically or politicallybesieged in countries or
(15:58):
regions.
So the committee actuallyrecognizes that Bitcoin and some
other cryptocurrencies.
Do have real utility and can beused for good.
This directly contradicts theirstatement that they do not
achieve any significant benefitfor Muslims or their countries.
I should also mention that thepotential for cryptocurrencies
(16:19):
and their utilities is evolvingall the time, and therefore
making an argument forprohibition based on their
utility today is extremelyshortsighted.
The last reason they give isthat dealing.
That is Bitcoin andcryptocurrencies and
circulating.
It leads to great evils andgreat harm to individuals,
(16:39):
society and the state from moneylaundering operations, drug
trade, weapons, trade,transferring a lot of money
resulting from criminaloperations, and thus contribute
to an increase in criminalactivities and financial fraud.
And.
Harmful consequences.
The nation and its states mustbe preserved from it by blocking
(17:01):
the pretext to it, which is theprevention of dealing and
trading in these currencies.
For the HAIs, there should beneither harming or Laura.
Nor reciprocating harm, or whichwas included by Malik in El
Malto.
Of course, we want to minimizeharm in society.
Of course, sometimescryptocurrencies are used for
(17:21):
harm.
Other things that are sometimesused for harm include the
internet, mobile phones, cars.
And cash.
So are these other thingsprohibited as well, because
sometimes they can be used forharm or is it more accurate to
say that it is prohibited toengage in crime and harming
others regardless of thetechnology being used?
(17:44):
Is that a more accuratestatement?
I contest that it is so long asthe crime is not inherent to the
technology itself, thetechnology.
Should not be prohibited.
It should remain permissible.
Further, there are more than20,000 different
cryptocurrencies each withdifferent characteristics and
different use cases that they'reoptimized for.
(18:05):
So is the opinion suggestingthat.
All of these cryptocurrenciesare used in crime the majority
of the time.
Some of these cryptocurrenciesare meant for file storage,
others to connect the blockchainto real world data and others
for payments.
So is the opinion arguing thatall of these cryptocurrencies
(18:25):
are used for crime most of thetime?
If so, the opinion certainlyprovides no evidence.
Depending on the source, onefinds wildly varying estimates
of how much cryptocurrencies areactually used in crime.
According to one article, theseestimates vary from 1% to half
of all activity, so there'sclearly no consensus here.
(18:46):
Moreover, according to theEuropean Union Agency for Law
Enforcement cooperation, or EuroPoll, crypto may be key to
cracking down on crime.
Blockchain networks allowinvestigators to easily follow
illicit funds and recover stolenassets converted into crypto.
Further Euro poll stated thatthe money laundering schemes
(19:07):
detected are largelycharacterized by cash movements
rather than any form of virtualcurrency.
Although not all use of cash iscriminal, all criminals use cash
at some stage in the moneylaundering process while the
world is looking with concern atthe possible misuse of virtual
currencies by criminals.
This report may seem somewhatunusual.
(19:29):
And that it is not highlightinga new phenomenon or an emerging
risk.
Money laundering schemesdetected by law enforcement are
still largely characterized bytraditional techniques, in
particular the use of cash.
So it would appear that cash ismore prevalent in crime than
cryptocurrencies are.
So is cash prohibited?
The opinion makes a claimlinking crypto and crime and
(19:51):
then refers to count them zerosources to back up their claim.
Not one source is cited in thisopinion to back this claim up.
There is no evidence thatsuggests that crypto is more
prevalent in crime.
Than cash or traditionalcurrency, and therefore, this
reason, again, like the fivebefore, it does not stand the
(20:12):
test of critical interrogation.
I find none of the reasons citedin this opinion for prohibiting
cryptocurrencies.
Valid in any way.
The opinion ends with thecurious position that they are
not saying cryptocurrencies areprohibited forever.
If their utility changes, sowill the opinion.
The problem with this is thatprohibiting today and waiting to
(20:35):
see what happens.
Means waiting for non-Muslims todevelop the space for Muslims to
have no role in developing thistechnology.
It relegates Muslims to the roleof consumers and excludes them
from having a role in making thetechnology more beneficial.
This consumer role.
Is, in my opinion, unbefittingMuslims and we should not accept
(20:56):
it.
Overall, I find this opinion tolack the type of rigorous
scholarship and cogent argumentsthat I would expect from a body
that chose the very.
Lofty name of the InternationalUnion of Muslim Scholars.
We at Practical Islamic Financewill continue to take the time
to analyze each individualcrypto for what it is based on
(21:18):
its own merits.
In order to determine ourcomfort level investing from a
Halal perspective, you canaccess our Halal reports for
free on practical islamicfinance.com.
We're using the link in thedescription.
This took me a lot of time toput together, so if you don't
mind, leave a like and subscribeand share.
People that you think may beinterested.
(21:39):
Until next time, make sure totake care of yourself.
Asum and peace be upon you are.
as Salam Malko, theInternational Union of Muslim
Scholars recently released anopinion stating that Bitcoin and
cryptocurrencies are prohibited.
They give six reasons for theirdecision, and I'm about to
review each of these six reasonsand tell you why I think they
are dead wrong.
First, what did they say?
The opinion says it isprohibited to deal with Bitcoin
(00:21):
and other unofficialcryptocurrencies in their
current condition.
Trade them or manufacture.
For the following reasons.
Now, by unofficialcryptocurrencies, they are
referring to cryptocurrenciesthat are not issued by a
government.
So in case a government doesdecide to issue cryptocurrencies
in the future, they are inpassing judgment on that.
It's important to note thatthere are many cryptocurrencies,
(00:43):
thousands of them that meet thedefinition of unofficial
cryptocurrency.
The language of this opiniondoesn't seem to distinguish
between them.
It includes all of themregardless of their category,
utility payments, security,stable coin, defi, nft, asset
backed.
All of these cryptocurrenciesseem to be included by this
(01:06):
opinion.
This was the first red flag forme.
It makes sense that differentutilities of various
cryptocurrencies.
Different definingcharacteristics should bring
about different opinions ontheir permissibility.
I find this lack of nuance inthis recent opinion, quite
unbefitting.
For a body that claims the loftyname of the international union
(01:30):
of Muslim scholars, if I'm goingto be even blunter, this lack of
nuance is irresponsible.
There are a large number ofpeople that care about what this
union has to say, so they shouldchoose their words very.
Most people who read thisopinion think the opinion
relates to all cryptocurrenciesregardless of their utility.
(01:50):
Yet the opinion itself seems tobe referring.
When you look at the reasoning,it seems to be referring to
Bitcoin and Bitcoin likecryptocurrencies that are used
to make payments and transfervalue.
Now we at Practical IslamicFinance will continue to take
the time to analyze eachindividual crypto for what it is
based.
(02:11):
Its own merits in order todetermine our comfort level,
investing from a Halalperspective, and you can access
our list of reviewedcryptocurrencies for free on
practical islamic finance.com orusing the link in the
description.
Now, continuing with the text ofthis opinion, the first reason
for prohibition, which they citesays the following, the pillars
(02:34):
of currency and the conditionsof money are not met according
to.
Economists and others, and thepillars of money and currencies
are to be a means of measurementand a medium between other funds
so that the funds are estimatedby them and that there is no
purpose in their own objects,and that their ratio to other
funds is one ratio.
There is none of this in Bitcoinand similar digital currencies,
(02:57):
and therefore it is not a realcurrency.
Well, let's assume what they aresaying regarding Bitcoin and
similar cryptos not meeting therequired conditions of currency
and.
Is in fact true for argument'ssake.
We'll assume this is true.
Who said the only things thatMuslims are allowed to deal with
trade in and manufacture areforms of money or currency?
(03:19):
Fruits and vegetables are notforms of money.
Services are not money.
Oil and gas are not money yet.
These are all things that aMuslim is allowed to deal with,
trade in and manufacture.
So how does claimingcryptocurrencies are not money
validate in any.
The opinion that they should beprohibited for Muslims to deal
with.
This would be like when carsfirst came out, the authors of
(03:41):
this opinion coming together andsaying, well, we've reviewed the
characteristics of cars and haveconcluded that because cars
don't have hearts, tongues,tales, and many other parts,
they do not meet the definitionof a horse.
Therefore, Muslims are notallowed to deal with tradein or
manufacture cars.
If you say dealing with X isprohibited in Islam because it
(04:02):
does not meet the definition ofmoney, you are implying that the
only thing Islam allows you todeal with are forms of money.
This is a false implication.
So the first reason in thisopinion can be.
Very comfortably tossed out forbeing completely irrelevant to
prohibition.
The second reason that they citeis that cryptocurrencies and
Bitcoin has none of thefunctions of money and
(04:24):
currencies, the most importantof which are being a general
medium of exchange, a measure ofvalue, a store of wealth, and a
standard for future payments ofdebts.
Bitcoin and other similardigital currencies do not
perform.
Any of these functions?
Well, I have to admit, it's kindof hard to distinguish between
the first and second reasonshere.
They do seem largely redundant.
(04:45):
If I'm being generous, I'll saythe second reason is saying that
not only are cryptocurrency notvalid forms of money or
currency, but they're alsounable to fulfill any of the
functions of money and currency.
So from this, we're supposed tomake the rather acrobatic jump
in logic to say, this is areason why Muslims are not
allowed to deal with trade-in ormanufac.
(05:07):
Sorry, this is not validreasoning for prohibition in
Islam.
Valid reasoning for prohibitionin Islam is to say a Los says
the prophet piece upon him saidSo and so is har, and this new
thing is really similar to thatthing.
Which we know to be Hi, andtherefore this new thing is hi,
and there hasn't been any ofthis so far, so let's keep going
(05:29):
because believe it or not, itactually gets worse.
The third reason that ismentioned is that
cryptocurrencies are not goodsbecause they are meant to be
exchanged and not intended forthemselves.
As our goods, nor are theyfinancial assets.
There are not any type of assetin kind assets services or
something similar and cannot beconsidered as shares.
(05:49):
Cash holding intrinsic value, aright or a benefit.
This argument is basicallysaying we're trying to fit
cryptocurrency.
Into a bucket that we'refamiliar with, and it's not
really fitting neatly into anyof these buckets.
And since it isn't like anythingwe're familiar with, we're just
gonna say it is prohibited.
This is the exact opposite ofthe Islamic approach.
(06:12):
This is because an Islam, thedefault for everything is
permissibility, with exceptionto rituals of worship, of
course.
Therefore, the proper sequencehere is to start with the list
of things that are prohibit.
In Islam and to see ifcryptocurrencies are like any of
these prohibited things.
And if it isn't and it doesn'thave the same impact as any of
(06:33):
these prohibited things, thenthe matter in question is
permissible.
The opinion fails to say whichprohibited category
cryptocurrencies fall in.
It is completely un-Islamic tosay because we aren't able to
categorize crypto into somethingwe are familiar with.
It is therefore, This is not howprohibition in Islam works, as
(06:54):
I've shown it is in fact theopposite of how Prohibition
works.
Now, putting this erroneousapproach aside that claims they
made about cryptocurrencies arefalse, cryptocurrencies are a
type of asset.
Namely a digital asset.
The definition of an asset issomething that is either useful
(07:14):
or valuable.
One can have legitimatearguments about the usefulness
of various cryptocurrencies, andindeed, I will submit that many
of the cryptocurrencies that areout there today, and perhaps a
majority of them, arecompletely.
There is no real usefulness inthem.
However, I would consider someof them to be quite useful.
(07:35):
Consider Bitcoin users using theBitcoin network can transfer
value through the Bitcoinnetwork to anyone on the planet
in any amount, at any time, justas easily.
As they send a person email, Ithink that's useful.
However, usefulness aside, whatyou cannot really argue with is
the fact that thesecryptocurrencies definitely have
(07:57):
value, as is evidence by thefact that their prices readily
verifiable at any point in time.
And often there exists a highlyliquid market.
For holders to realize thisprice at any time.
This is certainly true forBitcoin and it's true for many
other cryptocurrencies.
If you have any doubt thatBitcoin is an asset, just ask
yourself, who has the higher networth all else being equal?
(08:20):
Someone with no Bitcoin orsomeone with 10?
Which of the two would yourather be?
Of course, the Bitcoin holder.
Has a higher net worth andtherefore Bitcoin is an asset.
That said, as I mentioned, thisis in my mind, the less
important of the two points Imade.
The more important point is thattheir entire approach is
backward.
Whether or not Bitcoin is likesome other category that we're
(08:44):
familiar with.
Is irrelevant to the question ofwhether or not it should be
prohibited.
The relevant question is to ask,is Bitcoin like something that
we know is prohibited?
That would be a good reason tosay it is prohibited, but this
question wasn't even asked.
What matters is.
Whether or not Bitcoin and othercryptos meet the definition of
(09:05):
something that has beenprohibited by a lost power
dialogue or his messenger piecebe upon him, and this argument
has yet to be made.
The fourth reason for theopinions prohibition of Bitcoin
and crypto curr is that Bitcoinand similar digital currencies
do not represent any real.
Nor are they issued by theguarantee of a state that
(09:28):
approves them or a central bankthat guarantees them and for
money.
It is a necessary condition thatit is guaranteed in value by the
one who issues it for centuries.
Jus have been aware of thedangers of this deed limiting
the right to mint money to theduties of the state and the
(09:49):
Salton Iam.
Ahed May a law.
Mercy on him said it is notappropriate to strike Dhes
except with the permission ofthe Salton.
And this was in the book, UL andAra may aah have mercy on him,
said it is disliked for thesubjects to strike the Dhes even
(10:10):
if they are pure, because it isthe matter of the em.
Now, as for existence, Bitcoinand digital currencies are just
as.
And just as existent as anyother software.
If the website of theInternational Union of Muslim
scholars is real, then Bitcoinand other cryptocurrencies are
(10:32):
real as well as for being issuedby a guarantor or state.
In no instance is this mentionedas a requirement in either of
these sources of truth in Islam,which is Lass book or the son
of.
A profit piece be upon him.
Citing what Iam Ahed said morethan a thousand years ago is
(10:55):
wrong, and it's embarrassing.
To be honest, it's wrong becauseIam Ahmed lived in a very
different time that didn't havethe technologies we have today,
such as the internet and block.
And what is possible today, hemay have never even imagined.
It is reasonable to suspect thathis opinion may have been very
(11:17):
different if he had beensurrounded by the technologies
we have at our disposal today.
It's embarrassing because I, edwas not divine.
He was not divinely guided, andyet he is being cited more than
a thousand years after his.
As if his opinion is a proof ofsomething, the fact that we are
looking to Imam Ahed or then athousand years after his death
(11:40):
for guidance on a matter asmodern as blockchain and
cryptocurrency suggests, and I'mgonna be blunt here,
intellectual laziness.
Rather than coming up with freshideas that are appropriate for
the context in which we live,we're relying on the opinions of
a man who has been dead for morethan a thousand years, was not
divine or divinely guided andlived in a much different time
(12:03):
and context.
And I'd like to think that ifIam Ahed was alive today, he
would probably agree with me.
Most people don't agree withthemselves from 10 years ago, so
it's more than likely that ifIam Ahmed were alive today, he
would not agree with all theopinions he had a thousand years
ago.
Yet some of us still insist onclinging onto them and citing
them as if they were revelation.
(12:24):
It's no coincidence that you cantrace the decline of the Umma
and it's.
Stop leadership to around thetime.
Many of these books that wecontinuously cite today stopped
being written.
Finally, the necessity of statebacked or state issued or state
guaranteed currency has beenempirically proven to be false.
(12:46):
The only thing that matters forthe value of.
Is that it maintains theconfidence of its users.
Whether or not the issuedcurrency is backed by a state
will not save its value if itloses the trust of its users.
Look at the Lebanese Lara hasthe full support and backing of
the Lebanese government.
But the Lebanese people don'ttrust its value as is evidenced
(13:08):
by its price compared to prettymuch anything else.
And as is evidence by thepopularity of Bitcoin in
Lebanon, they trust Bitcoin.
A lot of Lebanese do trustBitcoin a lot more than they
trust the Lebanese Lara.
Look at Zimbabwe.
It has the full backing endsupport of the Zimbabwe
government, and yet it isapproaching zero almost because
(13:29):
the people lost their trust init.
So the source cited for this.
Is out of context and moreimportantly, the claim is
empirically false.
Next, dealing with Bitcoin andsimilar digital currencies and
their circulation does notachieve any significant benefit
for Muslims nor for theircountries, neither in industry,
(13:49):
in technologies, or in realtrade.
It's circulation and dealingwith it is contrary to the
purpose.
Of Sharia and money withoutnaming what those purposes are.
First of all, you are notallowed to prohibit a technology
because you don't see itspotential.
This is what caused some Muslimscholars to strongly oppose the
printing press when it firstcame out.
(14:11):
According to some sources, theprohibition was so serious that
at one point it was punishableby death.
This prohibition or negativeview towards printing presses
persisted for near.
300 years, and I think it'sreasonable to believe that this
prohibition contributed in someway to Muslims falling behind
other nations in scientificscholarship.
(14:32):
This prohibition was all madepossible because it did not rely
on anything that a lost poundDallas says, or the prophet
piece be upon him, said rather.
A few vocal voices were giventoo much weight and these voices
failed to see the potential ofthis new technology.
We should make sure not to makethis same mistake again.
Second, the benefits of somecryptocurrencies are already
(14:55):
demonstrably real.
For example, consider atransaction cost.
It's not uncommon for a domesticmoney wire transfer to cost 25
to$30 at least here in theUnited States, sending money
internationally can be even moreexpensive.
Compare this cost with$16million worth of do coin being
(15:15):
transferred earlier this yearfor.
Less than$1.
This reduction in transactioncosts is a very real benefit
that makes it easier for peopleto do business with one another
globally.
Not to mention there is notelling how the benefits of
cryptocurrencies evolve in thefuture.
Third, the opinion contradictsitself.
(15:36):
And proves that cryptocurrenciesare useful when it says later in
the opinion that the committeeexcludes cases of necessity and
urgent need from the prohibitionof dealing with Bitcoin and
digital currencies, such ashelping Muslims who are
economically or politicallybesieged in countries or
(15:58):
regions.
So the committee actuallyrecognizes that Bitcoin and some
other cryptocurrencies.
Do have real utility and can beused for good.
This directly contradicts theirstatement that they do not
achieve any significant benefitfor Muslims or their countries.
I should also mention that thepotential for cryptocurrencies
(16:19):
and their utilities is evolvingall the time, and therefore
making an argument forprohibition based on their
utility today is extremelyshortsighted.
The last reason they give isthat dealing.
That is Bitcoin andcryptocurrencies and
circulating.
It leads to great evils andgreat harm to individuals,
(16:39):
society and the state from moneylaundering operations, drug
trade, weapons, trade,transferring a lot of money
resulting from criminaloperations, and thus contribute
to an increase in criminalactivities and financial fraud.
And.
Harmful consequences.
The nation and its states mustbe preserved from it by blocking
(17:01):
the pretext to it, which is theprevention of dealing and
trading in these currencies.
For the HAIs, there should beneither harming or Laura.
Nor reciprocating harm, or whichwas included by Malik in El
Malto.
Of course, we want to minimizeharm in society.
Of course, sometimescryptocurrencies are used for
(17:21):
harm.
Other things that are sometimesused for harm include the
internet, mobile phones, cars.
And cash.
So are these other thingsprohibited as well, because
sometimes they can be used forharm or is it more accurate to
say that it is prohibited toengage in crime and harming
others regardless of thetechnology being used?
(17:44):
Is that a more accuratestatement?
I contest that it is so long asthe crime is not inherent to the
technology itself, thetechnology.
Should not be prohibited.
It should remain permissible.
Further, there are more than20,000 different
cryptocurrencies each withdifferent characteristics and
different use cases that they'reoptimized for.
(18:05):
So is the opinion suggestingthat.
All of these cryptocurrenciesare used in crime the majority
of the time.
Some of these cryptocurrenciesare meant for file storage,
others to connect the blockchainto real world data and others
for payments.
So is the opinion arguing thatall of these cryptocurrencies
(18:25):
are used for crime most of thetime?
If so, the opinion certainlyprovides no evidence.
Depending on the source, onefinds wildly varying estimates
of how much cryptocurrencies areactually used in crime.
According to one article, theseestimates vary from 1% to half
of all activity, so there'sclearly no consensus here.
(18:46):
Moreover, according to theEuropean Union Agency for Law
Enforcement cooperation, or EuroPoll, crypto may be key to
cracking down on crime.
Blockchain networks allowinvestigators to easily follow
illicit funds and recover stolenassets converted into crypto.
Further Euro poll stated thatthe money laundering schemes
(19:07):
detected are largelycharacterized by cash movements
rather than any form of virtualcurrency.
Although not all use of cash iscriminal, all criminals use cash
at some stage in the moneylaundering process while the
world is looking with concern atthe possible misuse of virtual
currencies by criminals.
This report may seem somewhatunusual.
(19:29):
And that it is not highlightinga new phenomenon or an emerging
risk.
Money laundering schemesdetected by law enforcement are
still largely characterized bytraditional techniques, in
particular the use of cash.
So it would appear that cash ismore prevalent in crime than
cryptocurrencies are.
So is cash prohibited?
The opinion makes a claimlinking crypto and crime and
(19:51):
then refers to count them zerosources to back up their claim.
Not one source is cited in thisopinion to back this claim up.
There is no evidence thatsuggests that crypto is more
prevalent in crime.
Than cash or traditionalcurrency, and therefore, this
reason, again, like the fivebefore, it does not stand the
(20:12):
test of critical interrogation.
I find none of the reasons citedin this opinion for prohibiting
cryptocurrencies.
Valid in any way.
The opinion ends with thecurious position that they are
not saying cryptocurrencies areprohibited forever.
If their utility changes, sowill the opinion.
The problem with this is thatprohibiting today and waiting to
(20:35):
see what happens.
Means waiting for non-Muslims todevelop the space for Muslims to
have no role in developing thistechnology.
It relegates Muslims to the roleof consumers and excludes them
from having a role in making thetechnology more beneficial.
This consumer role.
Is, in my opinion, unbefittingMuslims and we should not accept
(20:56):
it.
Overall, I find this opinion tolack the type of rigorous
scholarship and cogent argumentsthat I would expect from a body
that chose the very.
Lofty name of the InternationalUnion of Muslim Scholars.
We at Practical Islamic Financewill continue to take the time
to analyze each individualcrypto for what it is based on
(21:18):
its own merits.
In order to determine ourcomfort level investing from a
Halal perspective, you canaccess our Halal reports for
free on practical islamicfinance.com.
We're using the link in thedescription.
This took me a lot of time toput together, so if you don't
mind, leave a like and subscribeand share.
People that you think may beinterested.
(21:39):
Until next time, make sure totake care of yourself.
Asum and peace be upon you are.
Popular Podcasts
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Therapy Gecko
An unlicensed lizard psychologist travels the universe talking to strangers about absolutely nothing. TO CALL THE GECKO: follow me on https://www.twitch.tv/lyleforever to get a notification for when I am taking calls. I am usually live Mondays, Wednesdays, and Fridays but lately a lot of other times too. I am a gecko.
The Joe Rogan Experience
The official podcast of comedian Joe Rogan.