Assim al-Hakeem, a Saudi cleric has declared that cryptocurrencies are strictly prohibited under Islamic law. This is because they are both ambiguous and provide anonymity to criminals. He made this announcement on Ask Zaad, as Bitcoin prices shot above $10,000 for the very first time.
“We know that Bitcoins remain anonymous when you deal with it…which means that it’s an open gate for money laundering, drug money and haram money…There is a lot of ambiguity, if I have dollars and you have euros and we want to exchange this is permissible in Islam with the condition that it is hand-to-hand…in virtual currencies you don’t have this”
This ruling comes after the top religious body in Turkey also stated that Bitcoins were incompatible with Islam because the value of them is ‘open to speculation’ and can be used in ‘illegal activiies’.
A lot of this is because of the Bitcoin activity on darknet marketplaces, where they believe that users are using the currency in exchange for drugs and guns, which has raised a number of different suspicions about the virtual money.
In just one year, the value of Bitcoin has raised significantly from just $1000 at the start of the year, to more than $11,000 now. This dramatic rise has divided the financial community, with many believing that the currency might soon come crashing down again.
Bitcoin was created nearly a decade ago, to serve as an alternative to government issued currencies. Transactions involving Bitcoin can allow for complete anonymity, which has made it incredibly popular among those who wish to keep their financial activity and their identity private.
Bitcoin miner operate computer farms, where they can verify user’s transactions by solving complex mathematical puzzles. These miners are paid in Bitcoin, which can then be converted into a traditional currency.
The use of crypto currencies have changed in recent months. Whereas initially they were used as a method of payment, more recently they have become a very popular investment opportunity.