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🇮🇩 Indonesia /Technology

Why Indonesia’s Largest Islamic Organization Calls Bitcoin Haram Despite Its Legal Status as Money

From CNN Indonesia · () Indonesian

Translated from Indonesian and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources Context piece
  • Nahdlatul Ulama said using Bitcoin as a currency in Indonesia is religiously forbidden because Indonesian law recognizes only the rupiah as legal tender.
  • The forum nevertheless found that Bitcoin qualifies under Islamic jurisprudence as mal, or property, and saman, or a medium of exchange.
  • It said Bitcoin may be traded as a digital asset and that using it as currency is valid from a fiqh perspective, while remaining prohibited under Indonesian law.

Bitcoin has been declared haram as a currency in Indonesia by Nahdlatul Ulama’s Bahtsul Masail Waqiyyah forum, even though the forum considers the digital asset valid under Islamic jurisprudence in several respects.

KH Mahbub Maafi, representing the forum at the 35th NU Congress, linked the prohibition to Indonesia’s Currency Law No. 7 of 2011. The law recognizes the rupiah as the country’s legal means of payment. “If we want to make Bitcoin a currency, it may be possible, but it remains haram because the government prohibits it. Our currency is not Bitcoin, but the rupiah,” Mahbub said at a press conference in Jakarta on Thursday, Sept. 3.

If we want to make Bitcoin a currency, it may be possible, but it remains haram because the government prohibits it. Our currency is not Bitcoin, but the rupiah.

· KH Mahbub MaafiHe explained why Indonesian law makes using Bitcoin as currency religiously prohibited in the forum’s ruling.

The forum distinguished between saman, meaning a medium of exchange, and naqd, or currency. Mahbub said something can function as saman without being a currency, while every currency functions as saman. On that basis, the forum found that Bitcoin meets the conditions for mal, or property, and saman.

In Islamic jurisprudence, Bitcoin meets the conditions for property and a medium of exchange.

· KH Mahbub MaafiHe described the forum’s assessment of Bitcoin as mal and saman.

The considerations included Bitcoin’s practical benefits, their acceptability under Islamic law and their value in customary social practice. Mahbub also pointed to the fact that Bitcoin’s value has never actually fallen to zero. The asset can be exchanged for other goods and transferred between owners, while its private key was considered a safeguard against harm or loss.

The forum therefore said transactions involving Bitcoin as a digital asset are valid and permitted. It also judged the use of Bitcoin as a currency valid under fiqh, creating a distinction between religious jurisprudence and the restrictions imposed by Indonesian law.

Trading Bitcoin as a digital asset is valid and permitted. Interestingly, using it as a currency is also valid.

· KH Mahbub MaafiHe summarized the forum’s distinction between legal trading and Indonesia’s currency restrictions.
About this summary

Originally published by CNN Indonesia in Indonesian. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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