An Islamic scholar recently declared Bitcoin “permissible” under Sharia law, thereby opening the market to 1.6 billion Muslims around the world. This may also explain the sudden surge in Bitcoin’s price by more than $1,000 as the Muslim crypto traders increased.
Olga Feldmeier, CEO of FinTech startup Smart Valor says:
“Many speculated that the sentiment around bitcoin was getting more positive, and that it may have been related to Sharia law compliance”
‘Is Bitcoin Halal or Haram: A Sharia Analysis,’ a report written by Muhammad Abu Bakar, a certified Muslim legal expert, analyzes whether cryptocurrencies fall under halal or haram (prohibited) based on Islam’s strict definitions of money.
According to Abu Bakar,
“Crypto traders should not purchase cryptocurrencies for investment purposes. Rather, it is advisable to utilize cryptocurrency networks as a payment system in the cases where cryptocurrency network offer specific benefits and advantages over conventional systems.”
The study stated:
“Bitcoin is permissible in principal as bitcoin is treated as valuable by market price on global exchanges and it is accepted for payment at a wide variety of merchants. Moreover, many private individuals accept bitcoin as a medium of exchange in their private transactions.”
Matthew Martin, CEO of Blossom Finance says:
“Several recent fatwah issued by prominent Muslim scholars offered incomplete or contradictory opinions on the topic. With all the confusion out there, we wanted to offer clear guidance supported by solid research that benefits both laypeople and practitioners of Islamic finance”
The Sharia Law prohibits ‘usury’, the practice of lending money at high interest rates. As Bitcoin trading is volatile and involves huge profit and loss, there have been several debates in the Islamic Scholar community as to whether Bitcoin trading is permissible or not.
Josh F. Koya, a Twitter user said:
“The revolution is here… the bull is pawing with its forefoot, getting ready for the take off.”
Isaac Fay, another Twitter user said:
“But it will take more than 1 scholar to cause 1.8 billion Muslims to participate in it. Example, there’s a debate between two sides of important scholars about alcohol for centuries. One says it’s okay. One says it’s a big no-no. Similar concept.”
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US 2020 Presidential Candidate promises to provide better regulatory clarity on cryptocurrency market
Andrew Yang, the United States 2020 Democratic Presidential candidate, released a new policy for the regulation of the cryptocurrency space on April 20. The new policy statement titled ‘Crypto/ Digital Asset Regulation And Consumer Protection’, emphasized on the need for regulating the digital asset place, and also listed the actions Yang would do for the cryptocurrency market as the President.
Yang said on Twitter,
“New Policy #22 – Digital Asset/Cryptocurrency Regulation. Investment in cryptocurrencies and digital assets has far outpaced our regulatory frameworks. Investors need to know what their treatment will be in order to properly innovate in the U.S.”
On the official site, Yang stated that the cryptocurrencies “have quickly grown to represent a large amount of value and economic activity”. He further spoke about the lack of regulation of the cryptocurrency space, adding that the “patchwork of varying regulations” introduced by states has made it “difficult for the US cryptocurrency market” to compete with any other market, importantly China and Europe.
The Presidential Candidate further listed three key problems that needed to be solved, growth of cryptocurrency market being faster than that of the government’s response, differing regulations in different states, and uncertainty of the framework that would be unveiled.
Fang, a Twitter user, said,
“A candidate that is actually in touch with technology, blockchain and crypto. I missed the Bitcoin train but got in early on Ethereum mining: A significant % of my net worth is in crypto. So far I’ve done nothing but HODL. Our government has no idea what to do with digital asset”
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