Crazy Crypto Haram and the Pros and Cons

 


The Ijtima Forum of the Indonesian Ulema Council (MUI) has decided that crypto money is haram. What to do after that decision?

One of the news that caught the public's attention this week was the decision of the MUI Ijtima Forum. One of his decisions was to declare cryptocurrency illegal.


This decision was met with mixed reactions. MUI also gave a long explanation. Even this has attracted international attention.



What is the sequence of events? Gathered by us, here's the thing:




1. Crypto Haram is used as currency and why

MUI held the Ijtima Ulama Forum on Monday (9/11). In the forum, Ijtima Ulama discussed several things, one of which was related to cryptocurrency.


MUI officially forbids the use of crypto as a currency. But MUI calls crypto money as a commodity or asset with a number of conditions, it is legal to be traded.


"The use of cryptocurrency as a legal currency is haram. Cryptocurrency as a commodity or asset that meets the requirements as sil'ah and has an underlying and has clear benefits, is legal to be traded," said Chairman of the MUI Fatwa Asrorum Niam Soleh at the Sultan Hotel, Central Jakarta, Thursday. (11/11).


Chairman of the MUI Fatwa Asrorum Niam Soleh also said that there are several reasons that forbid crypto as a currency. One of the reasons is that cryptocurrencies do not meet the shar'i requirements for using currency.


The shar'i requirements for the use of currency include having a physical form and having value. In addition, the currency must be known for certain amounts, have ownership rights, and can be handed over to the buyer.


Niam also conveyed several reasons why crypto is illegal. This is because cryptocurrencies contain gharar, dharar, also contrary to Law Number 7 of 2011 and Bank Indonesia Regulation Number 17 of 2015.


"Cryptocurrency as a commodity or digital asset is not legal to be traded because it contains gharar, dharar, qimar, and does not meet the syar'i sil'ah requirements," he said.


2. Pros and Cons of Netizens About Haram Crypto As Currency

After the MUI decision to forbid crypto. Some netizens in the country are in favor of the decision, but most of them are against it.


Netizens who are pro-MUI's decision judge that money is indeed a means of buying and selling, but not to be traded. In addition, Indonesia already has Rupiah which is the currency and medium of exchange.


Meanwhile, netizens who were against this very regretted the MUI's decision. Because in the digital era, crypto is inevitable. Here are some of their comments:


"Yes, I agree with MUI, it is forbidden as a currency or medium of exchange in the Republic of Indonesia because there is already Rupiah, but if crypto is an investment like LM w personally, I agree," said @yowes***.


"Honestly, it's sad that cryptocurrencies are illegal... on the other hand, I'm grateful that there's a clear stance. But I don't know anymore, because the world is moving to a digital direction where everything will not take shape... What do you see on the screen? that's the form," said @nadh ***.


"Btw, the concept of Bitcoin as payment actually wants to eliminate the name of third parties or banks, who usually take usury," said @roar***.


3. Reaction from Crypto Asset Trading Platforms

Indodax CEO Oscar Darmawan explained that in Indonesia crypto assets are not used as currency. Indodax itself trades crypto assets.


"In Indodax itself, we trade many types of crypto assets, even the largest trading volume at Indodax comes from crypto assets that have physical assets as underlyings," Oscar explained in his statement, Friday (12/11).


He said, almost all crypto assets have underlying assets. He said, there is an underlying that is easy to understand in physical form. There is also the underlying in the form of issuance fees such as bitcoin.



"Bitcoin has an underlying in the form of bitcoin mining fees for the verification process and bitcoin issuance which requires electricity costs of 150 TeraWatt per hour, but its purely digital form, yes, this is a technological innovation, now money doesn't have a physical form, it's just digital like e-Money. So because there are production costs, bitcoins don't just appear, so don't be surprised if bitcoin prices continue to rise," continued Oscar.


Indodax itself currently has more than 4.5 million members with 99% of whom are Indonesians who live from trading crypto assets. Now Indodax has helped 4.5 million Indonesians through this difficult time during the corona pandemic by providing alternative jobs as crypto asset traders.


"In my personal opinion, almost all crypto assets have an underlying if you study technology and benefits, but it all comes back to the point of view of each trader," said Oscar.


4. MUI Forbids Crypto As Currency, Becomes International News

The decision of the MUI Ijtima Forum to forbid crypto as a currency, immediately became international news. Well-known business media Forbes lowered the title 'Cryptocurrency Is Unlawful For Muslims, Indonesia's Top Religious Council Says'.


"This decision could have an impact on the financial decisions of Muslims in the country even though this institution has no legal force," Forbes said.



While the Reuters news agency wrote the title 'Indonesian Islamic body forbids crypto as currency'. However, Reuters understands the context that MUI still allows digital asset trading.


"The MUI, the top cleric body, has declared the use of cryptocurrencies as a means of payment to be unlawful in Islam. But trading in digital assets is permissible, one of its leaders said," Reuters reported.



Meanwhile, the financial media Bloomberg covered the headline 'Crypto Is Forbidden for Muslims, Indonesia's National Religious Council Rules'.


"The MUI holds authority on Sharia law compliance in the country with the largest Muslim population, where the Minister of Finance and the central bank talk to them about Islamic finance issues," Bloomberg said.


Bloomberg added that the Indonesian government supports crypto assets, allows them to be traded as investments and will set up crypto exchanges. However, it is not allowed as a currency for payments.


"The stance of religious leaders in Indonesia may be different from that of their counterparts in other Muslim-majority countries. The United Arab Emirates has allowed cryptocurrency trading in Dubai while Bahrain has supported crypto assets since 2019," wrote Bloomberg.

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