The Indonesian Ulema Council, a top body of Islamic scholars, said Thursday cryptocurrency as a means of payment and a commodity to trade is unlawful for Muslims in that country that has the world’s largest Muslim population, according to multiple reports, a ruling that could affect Muslims’ financial decisions in that country though the council does not have legal powers.
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According to Fortune, the council advises Indonesia’s government, including its finance ministry, on finance and banking matters for Muslims—around 87% of Indonesians follow Islam.
The council’s head of religious decrees, Asrorun Niam Sholeh, said crypto has elements of uncertainty and harm, which forbids it as a payment option under Sharia law, Reuters reports.
Asrorun added the use of digital tokens as a commodity to trade is also forbidden, citing their lack of a clear value and physical structure.
Crypto is traded and invested in Indonesia’s commodities and futures market.
Asrorun left room for change, saying the council could approve cryptocurrency if modifications are made to comply with Sharia law, according to Bloomberg.
Total crypto transactions in Indonesia totaled 370 trillion rupiah, or $25.96 billion, between January and May this year, according to Indonesia’s trade ministry.
232.3 million. That’s the approximate number of Muslims in Indonesia, where nearly nine in ten of its population is Muslim, according to the U.S. Department of State. Indonesia has the world’s fourth-largest population and the 10th largest economy by purchasing power parity, according to the World Bank.
Other predominantly Muslim countries support cryptocurrency. In September, the United Arab Emirates’ financial regulators agreed to offer the trading of digital tokens in Dubai’s free zone. In 2019, Bahrain became the first Arab country to issue rules on crypto and has since backed crypto.
Though the council’s decree has no legal authority, it could affect Muslims’ decisions on spending and investing their money. The council’s presence in Indonesia’s financial sector has increased after the passage of a law on Sharia Banking. Under that law, Indonesian financial institutions are mandated to have a division that abides by Islamic law, according to the East Asia Forum.
Crypto Is Forbidden for Muslims, Indonesia’s National Religious Council Rules (Bloomberg)
Indonesian Islamic body forbids crypto as currency (Reuters)
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