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Muslims can’t trade crypto, says the head of Sharia compliance in the world’s largest Islamic country

November 11, 2021, 11:43 AM UTC

Cryptocurrencies don’t follow Sharia tenets and should not be used by Muslims, Indonesia’s National Religious Council said, challenging the future of the online coins in the country that houses the largest Muslim population.

The year’s hottest financial instrument is being taken up by banks, billionaires, and even countries, but it is haram, or forbidden, said Asrorun Niam Sholeh, head of fatwa, or religious decrees, at the Indonesian Ulema Council.

At an expert hearing reported by Bloomberg, Sholeh deemed that the online currency has elements of uncertainty, wagering, and harm and therefore goes against the central tenets of Islamic law. The national Ulema Council decides on Sharia compliance in Indonesia, and it is often consulted by the country’s finance ministry and central bank on Islamic financing issues.

The decision isn’t an official decree nor does it ban cryptocurrency trading in Indonesia. That being said, Sholeh’s point does have far-reaching implications on whether Muslims will feel comfortable trading the asset in Indonesia, and it may influence the take-up of cryptos by local institutions. Sholeh did say that if cryptos can show a clear benefit, it can be traded, which might be too tall an order.

Still, it’s a bad time to get kicked out of crypto.

Cryptocurrencies have been on a bull run since their historic October climb. Ether, the native cryptocurrency of Ethereum, is at an all-time high, priced at $4,708.60. Similarly, Bitcoin hit $68,000 yesterday, beating the previous record high set in late October. U.S. investment bank JPMorgan even forecast that Bitcoin could rally as high as $146,000 in the long run as it competes with gold.

So far, Southeast Asian countries have seen mixed action toward cryptocurrencies. Indonesia’s neighbor Singapore just saw its services halted from cryptocurrency exchange Huobi Global after the Chinese state crackdown.

Meanwhile, a little further north, Siam Commercial Bank—one of Thailand’s largest banks in which the nation’s king is the largest shareholder—just bought into Bitkub Online, the country’s biggest crypto exchange.

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