Idrus, Al Haddar, STAI Nurul Iman, Parung, idrus99@stai-nuruliman.ac.id.
Abstract
Furthermore,
Sharia certification from Bahrain for specific cryptocurrencies, such as
Stellar Lumens, provides a legal foundation for integrating blockchain
technology in compliance with Sharia principles. Agreements between Saudi
Arabia and Ripple demonstrate efforts to leverage blockchain technology in
financial transactions while considering Sharia aspects.
This
article concludes that a holistic approach involving religious perspectives,
Islamic institutions, and Sharia certification from specific countries is
essential to ensure cryptocurrency compliance with Islamic principles. This
comprehensive approach provides clear guidance for users and industry
participants within the cryptocurrency ecosystem.
Keywords: Cryptocurrency, Sharia, Islamic principles, legal foundation, holistic approach.
1. Introduction
Yenny
Wahid's emphasis on a nuanced understanding of cryptocurrency serves as a
crucial starting point, highlighting the need for informed decision-making
within the younger generation. Meanwhile, Indonesia's approach to
cryptocurrency, recognizing it as a tradeable asset with specific conditions,
adds layers of complexity to the discussion. Forums such as Batsul Matsail and
the MUI Fatwa Council play pivotal roles in shaping Sharia-compliant guidelines
through in-depth discussions and debates.
The
international dimension is explored through Bahrain's issuance of Sharia
certifications for specific cryptocurrencies, exemplified by Stellar Lumens.[2]
This certification paves the way for the integration of blockchain technology
within the bounds of Sharia principles. Additionally, agreements between Saudi
Arabia and Ripple underscore efforts to leverage blockchain for financial
transactions while respecting Sharia norms.
In
conclusion, a holistic examination that incorporates religious perspectives,
institutional insights, and Sharia certifications from specific jurisdictions
is imperative for establishing clear guidelines regarding the use of
cryptocurrency within the bounds of Islamic principles. This exploration aims
to contribute to a nuanced understanding of the complex intersection between
cryptocurrency and Sharia law.
2. Cryptocurrency and its Impact:
A Multidisciplinary Exploration
The
discovery of Bitcoin in 2009, declared as electronic money, marked a
revolutionary development attributed to an entity or individual known by the
pseudonym Satoshi Nakamoto. Utilizing peer-to-peer networks without centralized
storage, the technology allows verification to occur globally, with individuals
dedicating their computers to the process known as mining.[1]
Cryptocurrency's
widespread usage spans various disciplines, including Religion, Economics,
Social Sciences, and Technology.[2] However, in Indonesia, its adoption is still relatively limited.
The utilization of this technology has sparked debates, particularly among the
Muslim community, as highlighted by Yenny Wahid during a session organized by
the Islamic Law Firm (ILF). The uncertainty surrounding the fluctuating value
of these assets contributes to the apprehension.
The
multidimensional nature of cryptocurrency warrants examination from the
perspectives of Surah al-Nisa [4] verse 29: "O you who have believed, do not consume one
another's wealth unjustly or send it [in bribery] to the rulers in order that
[they might aid] you [to] consume a portion of the wealth of the people in sin,
while you know [it is unlawful]."and Surah al-Maidah [5] verse
90:"O you who have believed, indeed,
intoxicants, gambling, [sacrificing on] stone alters [to other than Allah], and
divining arrows are but defilement from the work of Satan, so avoid it that you
may be successful." These verses emphasize ethical and lawful conduct
in financial matters and caution against actions that are considered sinful or
detrimental to individuals and society. The principles outlined in these verses
contribute to the Islamic perspective on financial transactions and ethical
behavior. Shedding
light on the religious considerations surrounding its use. In the Indonesian
context, the lack of regulatory clarity regarding cryptocurrency as digital
currency contrasts with its approval as a recognized investment commodity,
reflecting the ongoing discourse.
To
better comprehend cryptocurrency, there is a pressing need for increased
literacy among the Indonesian populace regarding the potential and risks
associated with cryptocurrency investments. While it has yet to receive
authorization as digital currency, it has been granted approval as a viable
investment medium, navigating the complex intersection between legality,
technology, and religious considerations. This exploration aims to contribute
to a more nuanced understanding of the multifaceted implications of cryptocurrency
in Indonesia.
Religious Dimensions:
Cryptocurrency
introduces novel considerations within the realm of religious discourse,
particularly in predominantly Muslim countries like Indonesia. Scholars and
religious figures, including Yenny Wahid, engage in discussions that center on
the permissibility of cryptocurrency under Islamic law. The uncertainty
surrounding its volatile value and the absence of physical backing contribute
to debates within the Muslim community, prompting considerations of verses such
as Surah al-Nisa [4] verse 29 and Surah al-Maidah [5] verse 90.
Economic Implications:
The
economic impact of cryptocurrency spans both opportunities and challenges.[3] While some view it as a revolutionary form of investment and a
potential hedge against traditional financial systems, others express concerns
about its susceptibility to market volatility and illicit activities. In
Indonesia, the lack of regulatory clarity further complicates its economic
standing, prompting discussions about its recognition as a commodity rather than
an official digital currency.
Social Dynamics:
Cryptocurrency's
influence extends to social realms, where it introduces new paradigms of
financial inclusion and digital empowerment.[3], [4] Its decentralized nature fosters a borderless financial ecosystem,
enabling individuals globally to participate in transactions without the need
for traditional intermediaries. However, the lack of widespread adoption in
Indonesia suggests a need for enhanced public literacy regarding the potential
benefits and risks associated with cryptocurrency.
Technological
Transformations:
At its
core, cryptocurrency is a technological innovation powered by blockchain
technology.[1], [4] The implications of this extend beyond finance, influencing how
transactions are conducted, information is stored, and trust is established.
The blockchain's transparency and security attributes offer promise for various
industries beyond finance, including supply chain management and healthcare.
This
multidisciplinary exploration underscores the complex nature of cryptocurrency
and its far-reaching implications.[2] As debates persist, there is a critical need for comprehensive
literacy initiatives to educate the public about the potential benefits and
risks associated with cryptocurrency, fostering a nuanced understanding that
transcends religious, economic, social, and technological dimensions. The
intersection of these disciplines paints a vivid tapestry of the evolving role
of cryptocurrency in Indonesia and beyond.
Statement reflects a common perspective within
Islamic finance and ethics regarding transactions, including those involving
cryptocurrency.[5] In Islamic finance, the permissibility of transactions is often
assessed based on adherence to Sharia principles, and the prohibition of theft
or fraud aligns with these principles.
In
Islamic finance, the concept of halal (permissible) and haram (prohibited)
extends beyond the nature of the asset itself to include the method of
acquisition, ownership, and the overall transactional process.[2] This perspective emphasizes the importance of ethical conduct,
transparency, and fairness in all financial dealings.
In the
context of cryptocurrency, adherents of this viewpoint argue that as long as
the acquisition and ownership of cryptocurrency adhere to Islamic principles,
such as avoiding deception or theft, and the overall transaction complies with
Islamic finance principles, then engaging in cryptocurrency activities could be
considered halal.
However,
it's important to note that opinions on the permissibility of cryptocurrency
can vary among Islamic scholars, and the discussion continues as the technology
evolves. Some scholars may have concerns about the speculative nature of
cryptocurrency or its potential use in activities that are not in line with
Islamic ethics.
Individuals
seeking guidance on the permissibility of engaging in cryptocurrency
transactions from an Islamic perspective are often advised to consult with
knowledgeable Islamic scholars who specialize in finance and jurisprudence.
Islamic financial institutions and bodies may also provide guidelines to help
Muslims navigate the ethical dimensions of modern financial instruments,
including cryptocurrency.
The
acknowledgment and certification of Stellar technology by the Sharia Review
Bureau (SRB) represent a significant development in the intersection of
financial technology and Islamic finance. The SRB, as a reputable Sharia
advisory body licensed by the Central Bank of Bahrain, plays a crucial role in
providing guidance on the compliance of financial products and technologies
with Islamic principles. The fact that the SRB has reviewed the properties and applications
of Stellar, and subsequently issued guidelines, signifies a thorough evaluation
of Stellar's features and functionalities from a Sharia perspective. This
endorsement suggests that, according to the SRB's assessment, Stellar's
technology aligns with Islamic financial principles and can be considered
Sharia-compliant. The issuance of guidelines by the SRB is likely to provide a
framework for the implementation of Stellar technology in Islamic financial
institutions. This guidance could cover various aspects, including the use of
Stellar in financial transactions, its compatibility with Islamic contract
principles, and other Sharia-related considerations.[4], [6], [7]
Such
developments are indicative of the growing recognition of blockchain and
cryptocurrency technologies within the realm of Islamic finance. It reflects
efforts to integrate innovative financial solutions while ensuring adherence to
the ethical and legal principles outlined in Sharia law. This intersection
between financial technology and Islamic finance demonstrates a proactive
approach to embracing technological advancements within the context of
religious compliance.
3. Conclusion(s):
This article concludes that a holistic approach involving religious
perspectives , institutional
insights, and regulatory considerations is essential for navigating the complex
landscape of cryptocurrency in the context of Islamic finance. The
multidisciplinary exploration has shed light on the religious, economic,
social, and technological dimensions of cryptocurrency, emphasizing the need
for a nuanced understanding.
Religious
Dimensions:
Understanding cryptocurrency's compliance with Sharia principles is
fundamental. The insights of religious scholars and figures, such as Yenny
Wahid, have illustrated the nuanced discussions within the Muslim community.
The consideration of verses from the Quran, including Surah al-Nisa [4] verse
29 and Surah al-Maidah [5] verse 90, adds a critical religious perspective to
the discourse.
Economic
Implications:
Cryptocurrency's impact on traditional economic systems is multifaceted. It
presents new investment opportunities and challenges, calling for a regulatory
framework that balances innovation with consumer protection. The recognition of
cryptocurrency as a commodity rather than an official digital currency in
Indonesia exemplifies the ongoing economic discourse.
The societal implications of cryptocurrency are evident in its potential
for financial inclusion and empowerment. However, the limited adoption in Indonesia
underscores the importance of public education. Enhancing literacy and
understanding of cryptocurrency can foster informed participation and mitigate
potential risks.
Technological
Transformations:
The technological underpinnings of cryptocurrency, specifically blockchain,
have transformative potential beyond finance. Acknowledging its applications in
various industries underscores the need for a forward-looking approach. The
transparent and secure nature of blockchain can redefine processes in supply
chain management and healthcare.
In conclusion, the article advocates for a holistic perspective that
considers the interplay of religious, economic, social, and technological
factors in the realm of cryptocurrency. It recognizes the importance of ongoing
discussions, regulatory clarity, and public education to foster responsible and
compliant engagement with cryptocurrency, particularly within the framework of
Islamic finance. This multidimensional approach aims to reconcile innovation
with ethical considerations, ensuring that the evolving landscape of
cryptocurrency aligns with the principles of Sharia and contributes positively
to society and the economy.
In
essence, the conclusion advocates for a balanced and informed approach to
cryptocurrency that respects religious principles, promotes economic growth,
considers societal implications, and harnesses technological advancements
responsibly. This comprehensive perspective aims to contribute to the ethical
evolution of cryptocurrency within the framework of Islamic finance, fostering
a harmonious integration of innovation and tradition.
Discussions
surrounding cryptocurrency within the context of Islamic finance have brought
to light various perspectives and considerations. These discussions involve a
diverse range of stakeholders, including religious scholars, financial experts,
regulatory bodies, and the general public. Several key points emerge from these
ongoing conversations:
Religious Scrutiny:
Religious
scholars engage in in-depth discussions regarding the permissibility of
cryptocurrency under Islamic law.[7] The focus is on ensuring that transactions adhere to Sharia
principles, and concerns about speculative nature and potential for illicit
activities are addressed.
The
emerging realm of cryptocurrency has sparked discussions among Islamic scholars
regarding its compatibility with Sharia principles, the guiding framework for
Islamic life. While some scholars view cryptocurrency with skepticism due to
its potential association with speculation, uncertainty, and illicit
activities, others believe it can be utilized in a manner compliant with
Islamic law.[2][8]
A key
concern among scholars is the concept of gharar, which refers to excessive
uncertainty or ambiguity in transactions. Cryptocurrencies, with their volatile
price fluctuations and inherent complexities, raise concerns about potential
gharar in transactions. Additionally, the potential for cryptocurrencies to be used
for illicit activities, such as money laundering or financing terrorism, raises
ethical concerns.
Despite
these concerns, some scholars argue that cryptocurrencies can be used in a
halal (permissible) manner if certain conditions are met. These conditions may
include:
a. Transparency: Transactions involving cryptocurrencies should be
transparent and traceable to minimize the risk of illicit activities.
b. Avoiding Speculation: Cryptocurrencies should not be used primarily
for speculative purposes, as this aligns with the Islamic prohibition on
gambling (maysir).
c. Compliance with Sharia Principles: Transactions involving
cryptocurrencies should adhere to fundamental Sharia principles, such as
avoiding riba (interest) and ensuring fair exchanges of value.
d. Regulatory Oversight: Clear regulations and oversight from relevant
authorities are necessary to ensure the integrity and ethical use of
cryptocurrencies.
The
ongoing discussions among Islamic scholars reflect the evolving nature of
cryptocurrency and the need for careful consideration of its implications
within the Islamic framework. As the technology continues to develop, it is
crucial for scholars to provide guidance and establish clear guidelines to
ensure that cryptocurrency is used in a manner consistent with Islamic values
and principles.
Regulatory Clarity:
The
need for clear regulatory frameworks is a central theme in discussions.
Regulatory bodies grapple with defining the legal status of cryptocurrency,
whether as a commodity, currency, or another financial instrument. Clarity is
essential for providing guidance to market participants. The need for regulatory
clarity surrounding cryptocurrency is a critical issue that has garnered
significant attention from governments and financial institutions worldwide.
The absence of clear and consistent regulations has created a sense of
uncertainty among market participants, hindering the widespread adoption and
integration of cryptocurrency into the global financial system.
One of
the primary challenges stems from the difficulty in defining the legal status
of cryptocurrency. Different jurisdictions have categorized cryptocurrencies in
various ways, such as commodities, securities, or digital assets. This lack of
consensus has led to inconsistencies in regulatory approaches, making it
challenging for businesses and individuals to navigate the complexities of the
cryptocurrency landscape. Establishing clear regulatory frameworks for cryptocurrencies is
essential for several reasons:
a. Consumer Protection: Robust regulations can safeguard consumers from
fraudulent activities, market manipulation, and other harmful practices
associated with cryptocurrency.
b. Market Integrity: Clear rules can promote transparency,
accountability, and fair competition within the cryptocurrency market.
c. Financial Stability: Regulating cryptocurrency can mitigate
potential risks to the broader financial system, such as systemic instability
or contagion effects.
d. Anti-Money Laundering (AML) and Combating the Financing of Terrorism
(CFT): Regulations can help prevent cryptocurrency from being used for illicit
activities, such as money laundering and terrorist financing.
e. Innovation and Growth: A well-defined regulatory framework can
foster innovation and growth within the cryptocurrency sector by providing a
clear path for businesses to operate and consumers to engage.
To
effectively address the regulatory challenges surrounding cryptocurrency, a
collaborative approach involving government agencies, financial institutions, and
industry experts is necessary. International cooperation and coordination are
also crucial to establish a harmonized regulatory landscape that promotes
global consistency and stability. As the cryptocurrency sector continues to evolve,
the need for regulatory clarity will only become more pressing. Governments and
financial institutions must work diligently to develop comprehensive and
adaptable regulatory frameworks that protect consumers, promote market
integrity, and foster responsible innovation within the cryptocurrency
ecosystem.
Economic Implications:
Economists
and financial experts contribute by analyzing the economic impact of
cryptocurrency. Discussions revolve around its potential as an investment tool,
its role in fostering financial inclusion, and concerns about market volatility
and investor protection.[2], [5] Cryptocurrency has emerged as a revolutionary financial technology with the
potential to transform the global economy. However, its impact is still being
debated and analyzed by economists and financial experts.
a. Investment Potential:
Cryptocurrencies,
particularly Bitcoin, have gained popularity as an alternative investment asset
class. Their volatile price movements have attracted investors seeking high
returns, but also raised concerns about their speculative nature and potential
for financial bubbles.
b. Financial Inclusion:
Cryptocurrency has the
potential to promote financial inclusion by providing access to financial
services to individuals and communities that may be underserved by traditional
financial institutions. Blockchain technology, the underlying infrastructure of
cryptocurrency, can facilitate cross-border payments and remittances, reducing
transaction costs and time.
c. Market Volatility and Investor Protection:
The high volatility of
cryptocurrency markets has raised concerns about investor protection and the
potential for financial instability. Regulatory bodies are grappling with how
to regulate cryptocurrency exchanges and protect investors from fraudulent
activities and market manipulation.
d. Overall Economic Impact:
The long-term economic
impact of cryptocurrency is still uncertain. While it has the potential to
revolutionize financial services, foster innovation, and enhance financial
inclusion, its volatile nature and regulatory uncertainty pose challenges that
need to be addressed.
Key Factors Influencing Economic Impact:
a. Adoption Rate: The
widespread adoption of cryptocurrency as a means of payment, store of value, or
investment asset will significantly impact its economic impact.
b. Regulatory
Framework: Clear and consistent regulatory frameworks will provide a stable
environment for cryptocurrency businesses and investors, fostering innovation
and growth.
c. Technological
Advancements: Continued advancements in blockchain technology and related
infrastructure will enhance the efficiency, scalability, and security of
cryptocurrency systems.
e. Integration with
Traditional Finance: Integration of cryptocurrency with traditional financial
systems will facilitate its acceptance and adoption by mainstream institutions
and investors.
The economic impact of cryptocurrency will depend on its ability to address
its current challenges and harness its potential benefits. Governments,
financial institutions, and industry experts must collaborate to develop a
sustainable and inclusive cryptocurrency ecosystem that promotes innovation,
protects investors, and contributes to global economic growth.
Social and Cultural Considerations:
Societal
discussions focus on the cultural acceptance and understanding of
cryptocurrency. There is an emphasis on public education to raise awareness
about the benefits and risks, empowering individuals to make informed
decisions.
Technological Innovations:
Technology
experts delve into the underlying blockchain technology and its broader
applications. The discourse extends beyond finance, exploring how blockchain
can revolutionize industries, emphasizing transparency, and decentralized
systems.
The
global nature of cryptocurrency discussions involves collaborations between
international bodies, institutions, and Islamic finance experts. Sharing
insights and experiences fosters a collective understanding of the challenges
and opportunities presented by cryptocurrency.
Ethical and Responsible
Engagement:
Discussions
underscore the importance of ethical engagement with cryptocurrency.
Stakeholders advocate for responsible practices, emphasizing transparency, fair
trade, and adherence to ethical standards in line with Islamic finance
principles.
Public Awareness and
Education:
A
recurring theme is the need for enhanced public awareness and education.
Discussions emphasize the importance of educating individuals about
cryptocurrency, enabling them to navigate the space responsibly and make
informed decisions.
In
summary, ongoing discussions reflect a dynamic landscape where diverse
perspectives converge. As cryptocurrency continues to evolve, these discussions
play a crucial role in shaping the trajectory of its integration into Islamic
finance, ensuring that ethical, legal, and cultural considerations are taken
into account. Islamic scholars engage in in-depth discussions
regarding the permissibility of cryptocurrency under Islamic law. The focus is
on ensuring that transactions adhere to Sharia principles, and concerns about
speculative nature and potential for illicit activities are addressed. The multifaceted nature of cryptocurrency demands
a comprehensive approach that considers religious, regulatory, economic,
social, technological, ethical, and educational aspects. By fostering open
dialogues and collaborations, stakeholders can work towards a responsible and
inclusive future for cryptocurrency. By embracing collaboration across these dimensions, stakeholders can
collectively shape a responsible and inclusive future for cryptocurrency. This
approach encourages a dynamic and adaptive ecosystem that balances innovation
with ethical considerations, fostering a positive impact on society, finance,
and technology.
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