- Datuk Dr Daud Bakarbelieves that the country and the crypto investors need to understand cryptocurrencies for the Shariah perspective
- SC of Malaysia in 2019 started the crypto-regulation in the country for the Prescription of Securtirsa and the Digital Currency & Digital Token
- Daud in the SCxSC conference also said that the government has made it legal to issue various coins for capital sharing of the company
Cryptocurrencies are growing globally, and the pandemic has fueled the already bright burning fire of growth. Still, there are countries where the crypto adoption on a larger scale is yet to happen; Islamic countries like Malaysia are part of the list.
Datuk Dr Daud Bakar, Shariah Advisory Council Chairman for the Securities Commission Malaysia (SC) amidst the SCxSC Fintech Conference 2020, expressed his views. He believes that the country and the crypto investors need to understand cryptocurrencies for the Shariah perspective. He continued that cryptocurrencies are not a legal tender in the country but can be used as a legal commodity. The only criteria he puts forward is the digital asset shall not be backed by ‘ribawi items’ like gold and silver.
What is Shariah Analysis of Cryptocurrency?
As per various research papers, the Grand Mufti of Egypt Shaykh Shawki Allam, the Turkish government, the Fatwa centre of Palestine, and the UK-based scholar Shaykh Haitam in at different times stated cryptocurrencies as haram. They backed their comments with arguments of cryptocurrencies not being a legal tender, intangible as it is accessible only through the internet and used in various crimes such as money laundering, phishing, etc.
South African Islamic seminary and few other scholars believe that cryptocurrencies are permissible as they do not directly disobey Shariah’s laws.
Malaysia’s Stance on the Crypto-World
SC of Malaysia in 2019 started the crypto-regulation in the country for the Prescription of Securtirsa and the Digital Currency & Digital Token. For this, the government issued Capital Markets and Services Order of 2019 was issued. Post these three crypto-exchanges, namely, Luno Malaysia, Sinegy Technologies, and Tokenize Malaysia, have been issued permission to operate in the country. The three exchanges are given a full license of Recognised Market Operator, and yet just 2% of the country’s total population holds the knowledge of digital assets.
Daud in the SCxSC conference also said that the government has made it legal to issue various coins for capital sharing of the company. However, this is subjected to different restrictions under the fatwa resolution. Daud further talks about developing the country’s stablecoin with government authorities’ support and back the coin by commodities, projects, and various ventures.
Cryptocurrency understanding around the world is increasing as rapidly as its adoption. Concepts like mining, traceability, systematic impact, and security are not alien to people anymore. Therefore the same can be expected from the Shariah opinions and the Islamic countries in the upcoming times. As people become more and more informed about digital assets, the sooner will be Shariah’s acceptance.