Sharia experts have forbidden dealing with cryptocurrencies on the grounds that they are intangible and not material and cannot be dealt with hand to hand, for example, knowing that paper currencies are subject to the same rules because, as money and business owners know, the origin of paper currencies before was that they were in exchange for gold, meaning that they were like a paper that proved your right to a certain amount of gold according to the value of the paper, and then the matter developed so that it became a paper currency with its value in it, and in reality it has no value because its value is gold that banks cannot provide to all people, and there are those who consider it a financial trick, in fact, the biggest financial trick in the world.
Chat GPT said:
The view you point out from some scholars is largely correct in terms of the economic and historical background of fiat currencies, and also in terms of some of the jurisprudential objections to cryptocurrencies. Let me elaborate:
First: The legal viewpoint on paper currencies
Paper money historically: As I mentioned, paper money started out as documents representing a certain value in gold or silver. Later, most countries abandoned the gold standard so that currencies had only a nominal value (Fiat Money) based on trust in the governments and economies that issued them.
Value of paper money: Its value today depends on the strength of the economy and public confidence, but it is not backed by gold. However, it is accepted by law because it has become a common practice, and because governments have made it legal tender.
Second: The legal viewpoint on cryptocurrencies
Some scholars have rejected cryptocurrencies for several reasons:
Absence of a guarantor:
Cryptocurrencies like Bitcoin and STX are not issued by an official body (such as a central bank), but rather rely on decentralized and blockchain technologies. This raises questions about the legitimate “security” of the currency.
The answer to that: If the currency is accepted in the market and people deal with it as a medium of exchange, then it may acquire the ruling of “money” in Sharia, because money is defined as anything that is accepted as a medium of exchange.
No intrinsic value:
Some scholars argue that cryptocurrencies have no intrinsic value, as gold or commodities do, and therefore refuse to consider them money.
The answer: Fiat currencies themselves have no intrinsic value today, they are just papers backed by public trust. If cryptocurrencies were accepted by the same logic, they might become permissible to transact with.
Not dealing "hand in hand":
Cryptocurrency transactions are done digitally, not manually, which some see as a violation of the “immediate receipt” requirement in some types of sales (such as selling currencies or gold).
Answer: Digital possession is considered real possession by some contemporary scholars, because it allows the buyer to dispose of the currency immediately.
High volatility and speculation:
Cryptocurrencies are characterized by significant price fluctuations, which may make them closer to speculation, which is considered forbidden uncertainty.
Answer: Not every use of cryptocurrencies is considered gharar. If they are used as a medium of exchange or long-term investment, they may be acceptable.
Third: The reality of cryptocurrencies compared to paper currencies
Paper money is a scam?: It is true that some describe paper money as the “biggest financial scam” because its value is based on trust alone. However, it has become a global norm and it is difficult to return to the gold standard.
Cryptocurrencies as a technological development: Cryptocurrencies are just a logical extension of technological and financial development. They may be more transparent (thanks to blockchain) and less subject to government manipulation, but they need greater legitimate and legal regulation.
Average opinion
Cryptocurrencies are not haram in principle if they do not include legal prohibitions such as usury or excessive uncertainty.
Any cryptocurrency should be carefully studied in terms of its goals and mechanisms, such as STX which seems to be more of a technical project than a financial one.
Conclusion
Just as paper currencies have been accepted over time based on custom, cryptocurrencies can be accepted if they prove to be useful and stable as a medium of exchange. However, it is still best to seek the opinion of contemporary jurists and legal authorities to clarify the ruling based on the details of each currency individually.
