With cryptocurrency having faced backlash from individuals, governments and financial institutions, a religious organisation in Indonesia has now joined the ranks of crypto critics.
According to a report by Bloomberg, the National Ulema Council (MUI) has come out to voice its disapproval of crypto after noting that cryptocurrency trading is now declared haram – meaning forbidden or banned according to Islamic law.
The declaration means that the use of cryptocurrency in trading is forbidden or banned for Muslims.
MUI is Indonesia’s top Islamic organization funded by the government. It plays a major role in advising the government on national issues and policymaking decisions and also has the power to influence government decisions.
The Islamic organization holds the authority to set up and carry out Sharia law in the country.
The statement was made by MUI through its leader Asrorun Niam Sholeh in an expert hearing by the council.
According to the Islamic organization, they made the declaration due to the inability of cryptocurrency to adhere to Shariah law and show clear benefits.
MUI stated that cryptocurrency can only be traded by Muslims if it can “abide by Shariah tenets and can show a clear benefit.”
Meanwhile, the MUI declaration doesn’t mean crypto trading will be halted across the country. However, it can discourage Muslims both locally and internationally from investing in it and also make local institutions reconsider issuing crypto.
The Middle East has been known to be a crypto-friendly environment over the years.
However, this is not the same for Islamic bodies in the region, they have had a tough stance on criticizing and disapproving of the emerging asset class, deeming it sinful because of its price volatility.
Though they have given opportunities to stablecoins because they are created to reduce price volatility.
In 2018, Coinfomania reported that X8 AG, a Swiss-based Fintech firm that offers stable tokens, obtained financial certification from the Islamic advisory body licensed by Bahrain’s central bank, Shariyah Review Bureau (SRB) to expand its business in the Middle East.
This article is Originally posted on CoinCentral.com
Author: Lucky Ebosele