ERBIL (Kurdistan 24) - The High Committee for Issuing Fatwas within the Kurdistan Islamic Scholars Union on Thursday issued a fatwa against cryptocurrencies, stating digital currencies from the view of Islamic jurisprudence is “a convulated issue, and should be prohibited.”
The fatwa was issued on April 5, obtained by Kurdistan 24 on Thursday, came in response to a Kurdish citizen asking about the use of digital currencies from an Islamic point of view.
“The use of digital currency and those that are similar is wrong from an Islamic jurisprudence point of view,” the statement reads.
The fatwa referred to digital currencies in general, and “One Coin” in particular, but does not mention Bitcoin. It also provides reasons why it considers those currencies to be illegimate within Islam.
“It is a virtual currency, and Islamic law does not approve virtual currencies.”
Electronic currency only exist in digital form and allows for instantaneous transactions and borders transfers. However, there is uncertainty surrounding its volatility, regulations and customer identification.
The fatwa mentioned digital currency comes from an unknown source, and it is not clear who issues it, somethig they view as untrustworthy and convoluted.
It also stated that no international stock market recognizes the use of cryptocurrency.
“It lacks official guarantee from economic agencies, which means this currency has no international backing. Therefore, any money spent in this regard would be unreliable and unstable. It is like gambling.”
It noted that cryptocurrency are not managed by any trusted office, and the seller remains unknown. The anonymity of the seller has a direct impact on the unethical aspect of the use of digital currency.
The committee asked people in the Kurdistan Region to avoid using digital currency, “because it has no legitimate backing, and it does not operate under the principles and structure of legitimate laws.”
The Islamic scholars explained that they would issue a different fatwa on the use of digital currency if it would come from a reliable and internationally recognizable source, far from anonymity.
“The problem is not in the use of the currency, but the conditions and the way it was created,” the statement concluded.
Editing by Nadia Riva