Dear Hadi,
Dear Reader,
From an Islamic perspective, we don't believe the answer is simply “yes” or “no.” As we've noted in previous columns, we do not provide fatwas, but we will offer you an overview of the fatwas and opinions that exist on the topic.
There is genuine disagreement among contemporary Muslim scholars about cryptocurrency, and the ruling may depend on the particular cryptocurrency, its purpose, and the way it is traded. Some scholars consider certain cryptocurrencies permissible, while others prohibit them or advise Muslims to avoid them. The disagreement centers on several questions: Does cryptocurrency qualify as mal - recognized wealth or property - under Islamic law? Can it function as money? Does it have legitimate utility and value? Or is its value primarily speculative and therefore subject to excessive gharar (uncertainty) or maysir (gambling)?
The Permissive View
Among contemporary scholars who have argued that at least certain cryptocurrencies can be considered permissible digital assets are the following:
Mufti Muhammad Abu-Bakar, in his well-known Shariah analysis of Bitcoin and cryptocurrency, argued that Bitcoin could qualify as mal (property or wealth). His analysis emphasized factors such as customary acceptance, market value, and the fact that Bitcoin can be owned, transferred, and exchanged. His position is often cited as one of the significant early scholarly arguments for the permissibility of Bitcoin.
Mufti Faraz Adam has similarly argued that Bitcoin can qualify as a Shariah-recognized asset. His reasoning includes the principle that something does not need to be physical in order to qualify as property under Islamic law. If an asset has recognized value, can be owned and transferred, and has legitimate use, it may potentially qualify as mal. This does not necessarily mean that every cryptocurrency or every crypto transaction is halal; the specific asset and transaction still need to be examined.
Mufti Abdul Qadir Barakatullah has also expressed a permissive view of cryptocurrency, emphasizing the importance of ʿurf - customary recognition and accepted practice - in determining whether something can be treated as property or money. From this perspective, widespread use and acceptance may be relevant to determining an asset's status under Islamic commercial law.
Scholars who take this general approach may regard spot buying and selling of certain established cryptocurrencies as permissible, provided the buyer actually acquires ownership or control of the asset and the transaction does not contain other prohibited elements.
Their reasoning is generally that trade itself is not automatically gambling. Islamic law permits commercial transactions involving the possibility of profit and loss. The mere fact that an asset is volatile does not necessarily make every purchase or sale maysir. Likewise, not all uncertainty is prohibited: the concern is gharar that is excessive or materially affects the nature of the transaction.
The Restrictive or Prohibitive view
Other prominent scholars and religious authorities have prohibited cryptocurrency or expressed serious reservations about it. These include:
Shaykh Shawki Allam, the former Grand Mufti of Egypt, has taken a restrictive view of cryptocurrencies. Concerns associated with this position include extreme volatility, the possibility of fraud and illicit activity, inadequate regulatory oversight, and the potential for significant harm to the public.
Shaykh Haitham al-Haddad has also expressed a strongly negative view of Bitcoin and cryptocurrencies, focusing on concerns including excessive gharar, speculation, and questions about the nature and status of the asset itself.
Shaykh Assim al-Hakeem has likewise given restrictive answers concerning cryptocurrency, particularly in light of the high degree of speculation and uncertainty associated with many crypto markets.
A particularly significant recent example is Mufti Muhammad Taqi Usmani, one of the world's leading contemporary authorities in Islamic finance. A 2026 ruling associated with scholars at Jamia Darul Uloom Karachi, including Mufti Taqi Usmani, adopted a restrictive position, concluding that cryptocurrencies - including stablecoins in the context addressed by the ruling - do not currently qualify as recognized wealth (mal) under their interpretation of Islamic law and therefore cannot be treated as a valid means of payment.
Those who take this restrictive approach generally argue that many cryptocurrencies lack a sufficiently clear or stable basis of value, are subject to extreme speculation and manipulation, and may involve a level of uncertainty that exceeds what Islamic law permits. They may also argue that much cryptocurrency trading has become functionally similar to gambling, particularly when people buy assets purely in the hope that someone else will soon pay more for them.
The specific method of trading matters
Even scholars who considers a particular cryptocurrency permissible may still prohibit certain ways of trading it.
For example, spot trading, in which a person pays for an asset and acquires ownership or control of it, is generally the form most likely to be considered permissible by scholars who allow cryptocurrency.
By contrast, the following activities raise additional shariah concerns:
- Margin and leveraged trading, especially when borrowing involves interest (riba).
- Futures and perpetual contracts, which may involve selling what one does not own, deferred exchanges, or speculation without genuine ownership of the underlying asset.
- Short selling, which commonly involves selling an asset that the seller does not own.
- Interest-bearing crypto lending or accounts, which may involve riba.
- Highly speculative meme-coin trading, particularly where the activity resembles gambling or a pump-and-dump scheme.
- Fraud, market manipulation, deception, and unlawful use of cryptocurrency, all of which are independently prohibited.
Thus, even if a scholar regards Bitcoin or another cryptocurrency as permissible property, that does not mean every financial product or trading strategy involving it is permissible.
As you can see, there is genuine disagreement among conscientious scholars as to the permissibility of crypto trading. The disagreement reflects different applications of classical Islamic commercial principles to a new technology.
Scholars who permit certain cryptocurrencies generally emphasize customary recognition, market value, transferability, ownership, and utility. They argue that Islamic law has historically recognized different forms of property and exchange, and that something need not be physical to have legal value.
Scholars who prohibit or strongly discourage cryptocurrency emphasize excessive uncertainty, extreme volatility, speculative behavior, potential harm, and the absence of a sufficiently established underlying value or monetary status.
There is also a middle position: some scholars prefer not to issue a blanket ruling on “cryptocurrency” as a whole. Bitcoin, a stablecoin, a utility token, a governance token, and a token representing a real-world asset may have very different characteristics. The ruling may therefore depend on the particular asset and transaction.
As a matter of caution, we would advise Muslims to avoid transactions involving riba, prohibited leverage, excessive contractual uncertainty, short selling, and gambling-like speculation. Anyone considering cryptocurrency should ideally consult a qualified Islamic scholar who understands both Islamic commercial jurisprudence and modern financial markets.
In peace.
