Crypto Coins: Halal, Haram, or Conditional?

Key takeaway: Islamic scholarship offers three broad positions on cryptocurrencies.

1. Permissible (Halal) under conditions – dominant in Malaysia and an increasing number of Gulf scholars.

2. Prohibited (Haram) – adopted by Egypt’s Grand Mufti, Indonesia’s National Ulema Council, and several individual scholars.

3. Pending / conditional – bodies such as AAOIFI and the OIC Fiqh Academy classify crypto but have not issued a blanket ruling, emphasising case-by-case scrutiny.

Muslims therefore must evaluate every coin and transaction against ​Shariah principles of riba (interest), gharar (excessive uncertainty), and maysir (gambling), and favour regulated spot trading over speculative instruments.

1. Foundations in Islamic Law

Islam recognises anything that people accept as valuable (māl) as a tradable asset, whether tangible or digital 12. A coin’s Shariah status hinges on:

• Absence of riba (interest-bearing income or lending).

• Avoidance of gharar and extreme volatility without underlying utility.

• No maysir: returns should not resemble pure wagers.

• Lawful use‐cases (no financing of haram sectors).

• Immediate transfer of ownership in spot trades (baiʿ al-ṣarf rules) 34.

2. Major Institutional Fatwas

Year	Jurisdiction / Body	Ruling	Core Reasoning	Citation
2020	Securities Commission Malaysia – Shariah Advisory Council	Halal to invest & trade on licensed digital-asset exchanges; Bitcoin and 11 other tokens listed as Shariah-compliant	Cryptos are “māl”, not ribawi money; treated as tradeable commodities if spot-settled and underlying project is halal	456
2023	Saudi cleric ʿAbd al-Raḥmān al-Barrāk (Salafist)	Halal; Bitcoin akin to endorsed cheques	Transferable value, transparent record, no inherent prohibition	78
2021	OIC International Islamic Fiqh Academy (Resolution 237)	Classifies coins, alt-coins, tokens; urges regulators to address risks; stops short of blanket ban	Decentralisation, volatility, AML concerns need governance; leaves permissibility to national authorities	9
2021	Indonesian Ulema Council (MUI)	Haram to use/ trade crypto as money or investment unless it shows “clear benefit” and meets Shariah safeguards	High gharar, wagering, lack of state backing	101112
2018–24	Grand Mufti of Egypt	Haram – Bitcoin labelled speculative, prone to fraud, lacks central oversight	Protect public wealth, curb price manipulation	13
2018–24	Sheikh Assim al-Hakeem (KSA)	Haram until state regulation and deposit protection exist	Security breaches, gambling-like speculation	1415
2021-25	AAOIFI Bahrain	No definitive ruling yet; developing standards on “digital assets”	Principle of permissibility unless harms outweigh benefits	1617

3. Why Opinions Diverge

1. Nature of the asset
   – Payment coins (e.g., Bitcoin) with demonstrable medium-of-exchange use are more likely approved 6.
   – Utility or asset-backed tokens pass if underlying activity is halal and ownership is clear 1.
   – Meme-coins lacking utility and driven by hype are usually rejected because of gharar and maysir 1819.

2. Mode of trading
   – Spot buying and selling is broadly acceptable.
   – Futures, perpetual swaps, leveraged margin and interest-bearing “yield” products are widely classed as haram due to embedded speculation or riba 19.

3. Regulatory environment
   – Scholars in Malaysia and some Gulf states view state-licensed exchanges and AML safeguards as reducing gharar, tipping the balance toward permissibility 420.
   – Where regulation bans crypto as legal tender (e.g., Indonesia), local fatwas follow suit 1011.

4. Practical Checklist for Muslim Investors

1. Confirm Shariah screening: use exchanges that disclose token-by-token verdicts from recognised Shariah boards (e.g., Malaysia’s registered DAX list) 21.

2. Assess coin utility: favour coins with genuine payment, infrastructure or asset-backing functions; avoid purely speculative meme tokens.

3. Trade spot, not derivatives: ensure immediate delivery and ownership transfer; steer clear of leveraged products and interest-based lending.

4. Verify project activities: the blockchain or business funded by the coin must not involve alcohol, gambling, pornography, etc. 35.

5. Pay zakat: once holdings equal the nisab and a lunar year passes, treat crypto as wealth (māl) subject to 2.5% zakat 222.

5. Frequently Asked Coins

Coin	Typical Scholarly View	Notes
Bitcoin (BTC)	Halal by SAC Malaysia and several Gulf scholars; haram by Egypt, Indonesia	Debate centres on volatility vs. established adoption 7410.
Ethereum (ETH)	Halal on Malaysian list; some scholars cautious about tokens launched on it	DApps permissible if underlying use is halal 5.
Stablecoins (USDT, USDC)	Conditional; need full asset backing and no interest dealings	If reserves are riba-based debt instruments, problematic.
Meme coins (DOGE, SHIB, PEPE)	Predominantly haram	Pure speculation, no intrinsic utility 1819.
Asset-backed tokens	Halal when constructive possession of the asset exists	Must meet AAOIFI Standard 18 on qabḍ (possession) 1.

6. Conclusions

• No single universal fatwa exists. Shariah rulings depend on the coin’s purpose, trading method, and local regulatory context.

• Growing acceptance is visible in Malaysia and parts of the Gulf, fuelled by clearer regulation and Shariah standards.

• Significant opposition remains where volatility, anonymity, and speculative behaviour dominate.

• Muslims should adopt due diligence, favour regulated spot markets, and avoid interest-based or purely speculative instruments to stay within widely accepted halal boundaries.

1. https://shariyah.net/wp-content/uploads/2021/05/The-Shariah-factor-in-Cryptocurrencies-and-Tokens.pdf
2. https://www.ukm.my/ijit/wp-content/uploads/2023/11/Norazlina-Ijit-Vol-24-Dec-2024.pdf
3. https://www.binance.com/en/square/post/19076567566065
4. https://www.sc.com.my/development/icm/shariah/resolutions-of-the-shariah-advisory-council-of-the-sc
5. https://guide.luno.com/hc/en-gb/articles/27884942915741-Which-crypto-assets-are-now-considered-Shariah-Compliant
6. https://cointelegraph.com/news/malaysian-sc-shariah-advisory-council-praises-crypto-s-great-potential
7. https://www.binance.com/en/square/post/2021697865970
8. https://www.altcoinbuzz.io/cryptocurrency-news/bitcoin-gets-green-light-in-islamic-fatwa/
9. https://iifa-aifi.org/en/5980.html
10. https://cointelegraph.com/news/indonesia-s-national-islamic-council-declares-bitcoin-haram
11. https://www.aljazeera.com/economy/2021/11/11/indonesias-national-religious-council-says-crypto-is-forbidden
12. https://ringgitplus.com/en/blog/cryptocurrency/indonesian-islamic-council-mui-declares-cryptocurrencies-as-haram.html
13. https://www.islamicfinanceguru.com/articles/scholars-who-say-cryptocurrency-is-haram-and-those-who-say-its-halal
14. https://www.youtube.com/watch?v=8mGpcsAjIrc
15. https://lifeinsaudiarabia.net/is-bitcoin-halal-fatwa/
16. https://salaamgateway.com/story/qa-with-the-secretary-general-of-aaoifi-part-22
17. https://iifa-aifi.org/en/43414.html
18. https://changelly.com/blog/is-bitcoin-halal/
19. https://primexbt.com/for-traders/is-cryptocurrency-trading-halal-or-haram/
20. https://www.capitalmarketsmalaysia.com/digital-digital-asset-exchange/
21. https://www.sc.com.my/digital-assets
22. https://muzakarah.inceif.edu.my/kertas-kerja-slide/bacaan-tambahan/Zakat_payment_from_cryptocurrencies_and_crypto_assets_Aishath%20Muneeza_Magda%20Ismail.pdf
23. https://darulfiqh.com/shariah-interpretations-of-bitcoin/
24. https://www.qardus.com/news/what-is-cryptocurrency-and-is-it-halal
25. https://www.youtube.com/watch?v=d0TaZx0bycs
26. https://iifa-aifi.org/en/33163.html
27. https://www.youtube.com/watch?v=J0BBq0PQVeg
28. https://aims.education/is-bitcoin-halal-or-bitcoin-haram/
29. https://www.islamicfinanceguru.com/guides-and-faqs/crypto-guides-and-faqs
30. https://pdfs.semanticscholar.org/3663/aa6340acc2a36a493fff0ec7843587afb34f.pdf
31. https://blog.mexc.com/is-crypto-halal-in-islam-a-2025-guide/
32. https://aaoifi.com/aaoifi-world-bank-13th-annual-conference-working-papers/?lang=en
33. https://www.kcl.ac.uk/news/halal-crypto-could-blockchain-be-a-boost-for-shariah-compliant-finance
34. https://aaoifi.com/ss-1-trading-in-currencies/?lang=en
35. https://ejournal.iainmadura.ac.id/index.php/alihkam/article/view/8290
36. https://himjournals.com/hjebm/1436/1436/sharia-law-considerations-on-cryptocurrencies-between-halal-and-haram-in-an-islamic-economic-perspective-1509/
37. https://www.linkedin.com/pulse/saudi-arabias-crypto-embrace-from-warnings-sharia-compliance--r0yxc
38. https://programdoktorpbiuns.org/index.php/proceedings/article/download/89/106/366
39. https://www.jurnalfai-uikabogor.org/index.php/alinfaq/article/view/1963
40. https://ejournal.uniks.ac.id/index.php/InternationalConferenceUNIKS/article/view/2900
41. https://www.tandfonline.com/doi/full/10.1080/21665095.2021.1980413
42. https://www.academia.edu/91182613/Digital_Currency_Studies_In_Islamic_Perspective
43. https://www.oic-oci.org/docdown/?docID=6626
44. https://x.com/AhmedTayy/status/1739942078002655570?lang=bn
45. https://sharlife.my/article/content/Is_Cryptocurrency_Halal_in_Islam
46. https://www.sc.com.my/regulation/guidelines/recognizedmarkets/list-of-registered-digital-asset-exchanges
47. https://www.regulationasia.com/sc-malaysia-consults-on-overhauling-digital-asset-exchange-rules/
48. http://irep.iium.edu.my/121351/7/121351_Digital%20assets%20from%20Islamic%20perspective%20(2019-2024).pdf
49. https://ringgitplus.com/en/blog/cryptocurrency/securities-commission-approves-two-new-digital-assets-for-luno-malaysia.html
50. https://theedgemalaysia.com/article/sc-shariah-advisory-council-permits-trading-digital-assets-says-chairman
51. https://www.bernamabiz.com/news.php?id=2404245%2F
52. https://www.bnm.gov.my/-/ruling-of-the-shariah-advisory-council-sac-of-the-bank-negara-malaysia-at-its-201-meeting-and-26th-special-meeting-statement
53. https://www.bnm.gov.my/news/2020
54. https://news.bitcoin.com/malaysian-shariah-council-cryptocurrency-investing-trading/