Indonesia’s National Religious Council Designates Bitcoin as Haram

Indonesia’s National Religious Council has stated that cryptocurrency does not adhere to Sharia principles and hence should not be used by Muslims, raising concerns about the future of the online coinage in the country with the world’s largest Muslim population.

Despite the fact that the year’s hottest financial instrument is being adopted by banks, billionaires, and even countries, it is haram, or outlawed, according to Asronun Niam Sholeh, head of Fatwa, or religious decrees, at the Indonesian Ulema Council, which is based in Jakarta.

During an expert hearing, according to Bloomberg, Sholeh determined that the online currency contains characteristics of uncertainty, betting, and injury, and as a result, it violates the fundamental principles of Islamic law.

Indonesia’s national Ulema Council makes decisions on Sharia compliance, and it is frequently contacted by the country’s finance ministry and central bank on problems relating to Islamic financial institutions.

The decision does not constitute an official decree, and it does not constitute a prohibition on bitcoin trading in Indonesia. While this is true, the point made by Sholeh has far-reaching consequences for whether Muslims will feel comfortable trading the asset in Indonesia, and it may have an impact on whether or not local financial institutions will adopt cryptocurrency as a payment method.

Sholeh did state that if cryptocurrency can demonstrate a clear benefit, it will be traded, which may be a hard order to fulfill. Even still, it’s an awful time to be ejected out of the cryptocurrency world. Since their historic rise in October, cryptocurrencies have been on an unstoppable upward trajectory.

Ether, the native cryptocurrency of Ethereum, is trading at an all-time high of $4,708.60, making it the most valuable cryptocurrency in the world. Similarly, Bitcoin reached a new all-time high of $68,000 Wednesday, surpassing the previous mark established in late October.

In fact, the investment firm JPMorgan predicted that Bitcoin might rise to as high as $146,000 in the long term due to the fact that it is competing with gold. At this point, the response to cryptocurrencies in South East Asian countries has been inconsistent.

Following the Chinese government’s crackdown on cryptocurrency exchanges, Indonesia’s neighbour Singapore has recently had its services from Huobi Global suspended. Meanwhile, slightly farther north, Siam Commercial Bank Pcl, one of Thailand’s top financial institutions in which the country’s king is the largest stakeholder, has just acquired a majority stake in Bitkub Online Co., the country’s largest cryptocurrency exchange.