Muslim clerics from different schools of thoughts gathered together in Indonesia to see the status of crypto under Islamic principles. The clerics and scholars were from the highest Muslim institution of Indonesia called the “National Ulema Council”. The word “Ulema” means “clerics and/or scholars”.
Indonesia being a Muslim majority country, somewhat relies on the Council before it decides on certain issues. Islam describes certain rules and regulations which every Muslim man and woman have to follow in letter and spirit. For instance liquor is forbidden for Muslims and so is the meat of pork. The forbidden things are called “Haram” under Islamic principles. There is consensus amongst the Muslim nations that both these items are Haram.
There hasn’t been any Muslim country where the two items are declared other than Haram i.e. forbidden. Similarly, markups on loans and interest thereon are also declared as un-Islamic. However, the banks in Muslim countries are still operating on the model which involves charging of markup and interest.
In some Muslim countries, however, the clerics have huge authority. If they declare anything forbidden for Muslims then the Government is bound to honor the decree of the clerics. But the situation is different in Indonesia. Though there is utmost respect for the Muslim clerics yet the Government is not bound to implement a decree passed by the National Ulema Council.
National Ulema Council of Indonesia has recently picked up crypto to see whether it is Islamic or un-Islamic. After going through consultation, the Council has passed a decree in which they have declared crypto as un-Islamic. The use of crypto whether for the purposes of trading or for investment has been declared forbidden. The council said that there is no room or exemption for crypto under Islamic principles. So the Muslims should treat crypto forbidden as they are forbidden to go near pork meat or alcohol.
The declaration of the Council was signed by their head cleric namely Asrorun Niam Sholeh. He declared that crypto has failed to meet the standard of being “commodities” and therefore not Shariah compliant. The Council has however given its decision on cryptocurrencies and according to them, crypto is forbidden for Muslims. But that does not mean that the Indonesian Government is bound to implement the decision of the Council as it is.
Though the Government seeks consultation from the Council from time to time, yet the ultimate decision is that of the Government. In the matter of crypto also, the Council was consulted by the Finance Ministry of the country. At best, the Government will declare crypto trading un-Islamic but not declare them to be illegal.
This would mean that if any Muslim wants to trade in crypto then they can do so. The Government would not hold them accountable for committing any crime. Otherwise, if a Muslim takes alcohol in Indonesia, he is subject to fine and short-term imprisonment.
