Channel: Sajid Ahmed Umar
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Okay, let's take the next in your 2018 guidance on cryptocurrency as per your website, you didn't mention your view on Bitcoin.
So Hanalei, I anticipated this question popping up, it's the perennial question. What is the Islamic view on on Bitcoin?
Some halala Many people ask about Bitcoin but they don't talk about blockchain because it's really blockchain. That is phenomenal. It's a phenomenal piece of tech. And it definitely has the ability to mend and heal
the ills of, of capitalism, and actually bring a system that's closer to the guidance of the Sharia because one of the greatest things that it achieves is preventing double spending, which is what the Prophet salallahu alayhi wasallam himself prohibited us from doing right.
And I guess, I guess, blockchain is known because of Bitcoin. I mean, irrespective of the discussion, is it a currency or isn't it a currency?
Normally a currency Do you know it enjoys its reputation? It enjoys its status because of its source, right? The reputation
and permeability of its source?
Bitcoin is slightly different because with Bitcoin you have a situation whereby it's like the father gave importance to authority, the son gave importance to the Father. Right, it's Bitcoin that brought about importance to the blockchain. Now, with regards to the guidance on my website that was published in early 2018, and then Bitcoin is the perennial question, right, it keeps popping up. And here we have it again. And that guidance.
As I recall, I mentioned in it, the different views of Islamic scholarship regarding it.
It's a contemporary matter. So what have the contemporary scholars said about it? I also mentioned some of the things we need to take into consideration if we want to see cryptocurrencies achieve their potential, I also listed some guidance on sec cap.
I didn't mention my view, per se, on it, but in terms of, you know, this whole discussion pertaining to Bitcoin, it is a difficult one, not because of, you know, the tech side of it, and how to, you know, get around understanding the ins and outs of it. But even from a Sharia perspective, from a Sharia perspective, there's many aspects in relation to it that Islamic Islamic jurisprudence is concerned with and based on this, the discussion is far more vast than merely is Bitcoin, halal, and Haram. And I think this is where we seeing
I mean, I'm going to have good thoughts and say, it's, it's it's frustration, otherwise, some of the criticism out there by
you know, by the lay public, you know, regarding scholars have said it's Haram. Really, it's unacceptable. And this is it's unacceptable, because it's also disrespectful. And one thing we need to understand brothers and sisters in Islam, even though something can be permissible
in and of itself, and that ruling of permissibility is as clear as daylight in certain circumstances, it can be hard, we must understand this brothers and sisters in Islam, I mean, in my marriage, for example, and the Maliki madhhab, they have a discussion and a study about something permissible, that is connected to a group of people and the majority of those people have evil intentions with regards to their engagement with it, because of the intentions you have said then is very, as they say, it becomes impermissible. implementing what is known initially, is also referred to as preventative measures, all right, and the concept of preventive said that very, very closing
the means to something and opening the means to something is is part and parcel of, of Islam of jurisprudence, brothers and sisters in Islam and and we must be careful how we speak about our scholars and really, really fear Allah subhanho wa Taala when it comes to this, you know, these statements of these colors are backwards or these colors are uninformed, or it's not their specialty, and so on and so forth. Especially if you do that before speaking to them. It's not enough to lay claim just because you heard them in a video saying certain things, it's important to engage them and make sure that you are aware of the background knowledge that they have with regards
to something when they put out a recording or when they put out a view and so on and so forth before you lay claim into your view regarding
And they and their marriage. So this is important brothers and sisters in Islam. And by the way, it's not enough to have a quote unquote certification in Islamic finance for you to be an Islamic finance expert. And this is also something that really needs to be addressed. And this is something for another video because we see that somebody has some background into studying standards that exist within Islamic Finance, and they receive the certificate or some qualification or some association with an organization and then they feel that they are a specialist in the field, and they have a greater right towards having a view on something, as opposed to the scholars, I don't
mean to really prolong this, but this is something that really has to be said brothers and sisters in Islam, and that is why Islamic scholarship will always be far more vast and richer than just having a qualification in a particular matter. The the the, the plains of fatwah are far more vast and intricate. And that that is why it is part and parcel of the playing field of a true scholar. Now, in terms of, you know,
what the scholars have presented regarding
this, they've looked at it from two angles. Firstly, the Firstly, what
what is its reality, right? What is its its reality? Is it an asset? Is it a currency? Is it a monetary? Right, right? Is it similar to a credit card? What is it? This is one angle? And then the other angle is? What is it ruling? So I mentioned to you four ideas that have been coined and pitched Some have said,
it's, it's an asset. All right. So in that sense, they would call it a digital asset. But if we look at it closely, and we look at the reality of a digital asset, does a Bitcoin or an altcoin, we have tokens as well. inshallah, maybe if I remember, we can touch on that later. Is it similar? Is it like a digital asset that has a utility, for example? So this is something that needs to be looked at, right? And the jury has weighed in? And some have said, Well, we can just call it a digital asset.
linguistically, others have said, Well, if you use it linguistically, then be clear that it It's different to
a real digital asset that has some form of utility, for example, some have said it's a currency, but is it a currency? And perhaps we can look into that, because this is, you know, a common discussion. Some have said it, it brings about a monetary, right. And this is is true about it.
And some have said it sort of carries the function of a credit card.
Obviously, nobody's saying it's like a credit card, but it carries a somewhat similar function. Now, this is not the place obviously to go into those details, but this is some of the attachments that cryptocurrencies Bitcoin and other altcoins have been attached to in terms of the ruling, I did mention them in the in the 2018 guidance that was alluded to earlier. And we have scholars who have said it's allowed, we have scholars who have said that we prefer to remain silent. We don't feel that we have a view on the matter, or it's too early to have a view on the matter. And some of that is haram. Those who have said it's haram Some have said it's outright haram for reasons that they
feel is appropriate for this ruling to be carried and some have said it's haram to harima wasa lol mock acid. And this is
a diligent statement to be honest and how to hareem alwaysai lol mocassin meaning it's it's forbidden, but it's forbidden from the angle of it from from it as a means not from it as an as an end. Now, this is a very technical discussion and I think I will confuse things if I get into it. But the idea behind this is to highlight that when something is haram as a means then its level of prohibition is lesser than when it is haram as an ends, which means in certain circumstances, then it would be permissible, right, in certain circumstances, difficult, unnatural
you know, the idea of Bitcoin would be permissible, why because, in principle, if something is forbidden,
you know, from the angle of a means to hareem alosa l, then at times of need, that type of haraam, as an exception can now become permissible until the situation returns back to normal. In any case, this is what has been pitched now.
I, you know, I'm being protested. There's a protest here for my personal view on the matter. And I've shared this with many of my students and in my personal view,
I would say it is a distorted currency. And this is the view of some of my teachers and this seems appropriate because it
As I said, it being calling it a digital asset per se,
isn't precise. And calling it a currency per se, isn't precise either. So being a distorted currency, what does this mean? It means in certain circumstances it meaning Firstly, from the outset, it's closer, it's closer to being a currency. Because of now it's been in existence for so long, and the norms of people towards it, and the,
the the idea that people have about it, so it's closer to a currency than just an asset. But even from an Islamic perspective, right? It you would say it carries more characteristics that are synonymous with the currency than an asset. However, it doesn't carry all the characteristics of what constitutes a currency from a Sharia perspective, and that is why I pitch it as a distorted currency. So based on this, based on this, obviously, the question would then be asked that what constitutes a currency from an Islamic perspective, from an Islamic perspective, brothers and sisters in Islam, we don't have
you know, a verse in the Quran or a statement of the Prophet sallallahu alayhi wasallam or from the Sahaba that tells us this is what money is and this is what money isn't okay. But Islamic scholarship over time has looked at money and especially gold and silver and extracted from the way it was used and and is used, what they call the characteristics of money, right. So, these characteristics have to be there. Now, the different mother have discussed them in different capacities. Some have mentioned the concept of Maria some have mentioned the concept of the outcome, Maria refers to something as something
meaning an asset or you could say a form of wealth. So it's something that provides permissible benefit and it lasts.
But this is not specific to a currency right, this could this is something that includes assets as well, some have said the column it has legal value and it has the ability to be traded again, this is not synonymous and specific to a currency this applies to assets as well.
And some have pitched the concept of mania, alright.
But the mania is something that you could say, that is specific to what the currency is because the idea of ceremonia this idea refers to something being a unit of value and a standard through which a standard through which other or the value of other things are understood. Right. So through it, many things can be purchased, and their prices can be understood through it. Right. So like, we would say, for example, this product here, it costs two grams of gold, that product costs three grams of gold, and so on and so forth. Although when we look at gold, the majority of the scholars have said that gold is a currency not because of its weight, but because of this idea of thermonuclear its
ability to hold to to hold value and be a me a standard through which other things, or the value and the price of other things are understood. Also, so for example, number of as early he mentions from the characteristics of money that it's mazoon little km or Thoreau, right? So it's, it's something that you can put away for a rainy day, and it holds its value,
generally. Okay, so, but again, the he's highlighted this based on what people have considered money and how they've used it. So it's a characteristic from the characteristics of money. Also, scholars have said, who are miriah Lille metaphor ITIL agile?
So what does this mean? They say that and this again, is it's a characteristic of money. Why? Because when people engage in deferred trade, right, they normally understand the cost of that trade based on a currency and not an asset, so that they don't say the cost of this trade is you know, three camels for example. Rather, they say it's x amount of money. So these are characteristics of money now, does Bitcoin fulfill as a currency or even the other altcoins? Do they fulfill these these characteristics in the required capacity? Alright, so if you look at coins, like Bitcoin that will be kept, for example, and you look at the financial need of the world, not just the Muslims but
the world, and you look at debts that have to be paid, for example. Alright, cat, does it have the potential to fill the capacity of transactions that people will engage in? No, it doesn't. From here, we see there's a difference between it and an actual currency but for argument's sake, you could say they can be currencies that are uncapped, okay, that's true. If they are in cap then as of now, they still lack in terms of the characteristics I have shared in terms of what the fuqaha have stated, with regards to what a currency is, but generally brothers and sisters in
Islam at this call is in agreement that if people do Estela meaning they they come together upon an item and they say this item is going to be the means through which we will understand the value of things and through it, things will be traded, meaning it will be a means of trade. And this is an important aspect of which scholars discuss within the idea of the many as well that it was it the Tibetans, so it's a it's a standard to which you understand things and it's a means of exchange, then this will be a currency and the rules of Riba and will apply, and so on and so forth. Okay. So, in my estimate, and Allah subhanho wa Taala knows best, it's a distorted currency, maybe in some
circles, it could carry the idea of being a full currency, but those would be small circles, right wouldn't be something that is understood and on an international scale and observation is enough for us to to understand this now, what would be the ruling then to acquire it?
What would be the ruling to acquire it? And this way scholars have I mentioned to you a certain view, some have said it's hard on
me what seems plausible and clear to me and Allah subhanho wa Taala knows best? Is that being a digital currency, then from the outset, we have a principle in fact, that states from the outset, everything is permissible, unless if deemed impermissible, and the values through which things are deemed impermissible is said by the Sharia. It's set by the Sharia. So
based on this, based on this acquiring, I something which is considered a distorted currency would be permissible, right, so somebody says, I'm going to purchase it and keep it with me, it's something I want to have, and when I feel I don't have any interest for it, inshallah, I will sell it, alright, so they have no interest in getting into it because of the fear of missing out because there's a trajectory in the price and I want to get it and sell I'm gonna do day trading with it facing, it's just an something that I want to acquire. Okay, and when I don't need it, I'll sell it. And if I don't sell it, it's something that I want to have for example, then a person is free to do
what they want with their money on condition that they look after the other guidance of the Sherry when it comes to to spending that there should be no Seraph, there should be no extravagance, and so on and so forth. You shouldn't spend it bite with money that you that you've stolen, for example, and so on and so forth, right. So from this angle, purchasing it, as long as all the rules of transactions are looked after, from a Sharia perspective, and you keep it with you, when you don't want it you give it you'd sell it or give it away just like you would do with anything else, then from this angle is permissible. But when it comes to unmovable what this call is a MOBA, but the
speculative trading this whole idea of getting when it's hot and then get out and get in and get out and the price, you know moves up based on
a rumor here and it drops based on a rumor there and we push people towards getting involved because of the price trajectory then No, this I would this is impermissible because of the horror, the ambiguity and deception in in this is high, and the Sharia, Nabi sallallahu alayhi wa sallam now I'm at the heart of the Prophet sallallahu alayhi wa sallam forbade us from,
from trading in transactions whereby they meaning that have that have high levels of ambiguity and they resemble a gamble. Right? And we've seen this the way the price fluctuates upwards with serious trajectory, and then it fluctuates downwards again. And that's why brothers and sisters in Islam, it's not correct to push people into purchasing it, right because you know, the price goes up and make them feel as if the you know, the world is coming to an end, the dollar is going to end by this day. So you must get in getting whilst it's it's hard to have this grab this like as if it's a land grab. This is incorrect brothers and sisters in Islam. This is incorrect. Brothers and sisters, and
it's not when we speak about things, we should remember that from the beginning and until the end, we are worshipers of Allah subhanho wa Taala and we are governed by rules and regulations as well as morals, manners and etiquette in everything that we do. Right. So we shouldn't get into these trends and this fear of missing out friends and push people and you know, make them feel guilty if they don't get involved. Right and I've sat in in in some of these rooms, right the the crypto
you know, supporters and they have all the laser eyes and so on and so forth. And participated in some of the discussions, some are balanced, they tell you, you know, get into it because, you know, long term we believe it's going to reach a certain level but be ready to, you know, to lose everything. But some really they they operate in the space as if it is it is perfect from floors. It's the best thing since sliced bread excuse excuse the
the statement, but you get the idea. And they push people into it and make them feel guilty. If they're not This is unacceptable. But people now feel that they want to mortgage their property to an extent to buy cryptocurrency or they want to
put their pension, the pension that they've received at the retirement age into this and so on and so forth. Brothers and sisters, it's not we must be careful, right. And maybe it's because of this is because of this that scholars have said it's harder.
And this is an angle that those who criticize the scholars don't realize, because a scholar is talking based on his knowledge of his community, or from previous experience, sometimes they feel this is a matter that the door should be closed on. Because, you know, people don't have, or certain people without misty reminded they don't have the required level of presence of guidance when it comes to financial transactions. Some people mortgage their homes, they leave the family homeless, why? Because they wanted to jump on the bandwagon. And they were convinced that this thing is going to climb to a certain level, and they're going to get out and nothing's going to stop it.
And then what do we see? Right? So again, whenever you criticize a scholar, please think twice, think thrice and hold your tongue. Now.
So as I said, if we're going into the mobile era, but the speculative trading of it, then from this angle, it is forbidden. And Allah subhanho wa Taala knows best now, very quickly, I did say, and I've just remembered with regards to
tokens, then with regards to tokens, brothers and sisters in Islam, they say there's so many in terms of even idea some
some tokens represent halal
realities, right or halal assets.
Some represent haram acids,
an asset, and some represent a right to an asset. So we have to look at all these things before we understand the Sharia ruling. If it represents something Hello, then it's valid. If it remains something haram then it's haram for mabuni, about infopark. And this is a principle whatever is built on, on falsehood and Haram, and that which is impermissible, then is impermissible as well. Alright, so we must, we must remember this. If it if it offers you a right to something this there's also a difference because you know, if somebody says this token here, if you buy it, you own X amount of gold, that's one thing. But if they tell you if you buy it, you own a right to X amount of
gold, that's another thing. There's a difference between owning that gold and having a right towards purchasing that gold. Right, especially when it comes to trading these tokens now. So it's important that we take into consideration these these realities and we speak to our local scholarship and get the rulings to these things before we put our money in because remember, on the day of cam, Allah subhanho wa Taala is going to question as to things with regards to our wealth, how we entered in how we spent it and the diligence, when it comes to trade that's upon us. We need to ask Allah because Allah Allah Declan controllata alamanda, Mashallah, you've done this, and I've tried my best
to paint a picture around it. But this is important, right? Don't buy it and then ask the scholar. One other thing I want to say and
Allah knows best. But this is an understanding that has reached me about some tokens. There's some tokens that are sold via platforms. and the value of the token is based on very saveable that the platform attains from its collective trade of tokens of the tokens that are collectively traded on it, beat halaal, beat harem, and so on and so forth, some mareeba base, some music base, some cinema base,
you know, our code base and so on and so forth. Those tokens will be impermissible naturally, right? Because the value is developed from a portal that
buys and sells tokens and based on the profits that it receives, then that token receives its profit, but those trade activities,
or much of the trade activity is problematic. So this is another thing to take care of brothers and sisters in Islam. Subhan Allah, we've taken a lot of time on this question, how long have we taken?
Allah understand anyway, I pray this
quenches the first
of the base for this answer. Alright, I didn't mention it then. But inshallah, in summary, I've said that I view Bitcoin as a distorted currency, it's permissible to acquire, as the scholar say, Yan eba had never been at hijjah, an event which
that which is not forbidden, and it's permissible in normal times, not during times of need, and necessity, then those things are permissible to buy. So if a person wants to buy it for themselves, because they like it, it's something they want to have.
And then when they don't need it, they sell it. This is fine, but to go into speculative day trading with it, this is impermissible and Allah subhanho wa Taala knows best Don't forget the other advice that I shared with regards to
to the tokens