A Critical Analysis of Cryptocurrencies from an Islamic Jurisprudence Perspective

Abstract

Money has changed its form many times throughout history and is currently used as paper with a nominal value in the markets. However, money has becomes digital, especially with technology. Transactions are carried out with the infrastructure provided by banks and other leading financial institutions. As an alternative to the current situation, currency has began to turn into electronic money, and beyond that, cryptocurrencies have been developed independent of any central authority. The usage areas for and number of those using these new currencies are increasing daily.Bitcoin, which emerged in 2009, dominated the cryptocurrency market and attracted the attention of large masses with its rapid rise in value. As its value increased, the cryptocurrency market size reached more than $800 billion in early 2018.Users wanting to get a share from the value increases of Bitcoin through cryptocurrencies are not in line with the philosophy of cryptocurrencies. This also raises a problem of legitimacy for Muslim users in terms of Islam. In addition to the negative opinion published by the High Board of Religious Affairs in Turkey, negative fatwas are also found abroad.

On the other hand, Islamic jurists are also found who argue that cryptocurrency is not a holistic problem. In our study, the legitimacy of cryptocurrencies in terms of Fiqh will be evaluated multidimensionally using existing opinions. In addition, the basic features of cryptocurrency will attempt to be determined in accordance with Islamic Law.