Table of Contents
- A Bold And Historic Move
- The Islamic Perspective On Crypto
- Muslim Nations Increasingly Adopting Crypto
The Sultanate of Oman has embraced crypto, announcing the investment of millions in cryptocurrency mining operations.
Oman’s move has raised eyebrows, with Islamic scholars debating the legitimacy of cryptocurrencies and their compatibility with Sharia law.
A Bold And Historic Move
Oman, a country that adheres to strict Islamic principles and traditions, has entered the world of cryptocurrency mining. The country has announced a series of investments that significantly enhance its association with crypto. The move is in line with the country’s plan to position itself as a digital powerhouse in the highly competitive region. The Omani government has announced investments of nearly $800 million dedicated towards cryptocurrency mining. This includes a $300 million partnership with the Phoenix Group, a prominent entity headquartered in Abu Dhabi.
The partnership with the Phoenix Group aims to lay the groundwork for a 150-megawatt crypto mining facility in partnership with the Green Data City. The Green Data City is one of Oman’s leading licensed crypto mining firms. The facility is set to commence operations as early as 2024. Additionally, the country also granted approval for a $370 million mining venture by Exahertz International. According to several local reports, Exahertz plans to add an additional 15,000 machines by October to enhance operations.
The investments are a major milestone in the country’s bid to accelerate the growth of its digital economy, stated Oman’s Minister of Transport, Communications and Information Technology, Hamoud al-Maawali.
The Islamic Perspective On Crypto
Oman’s foray into the crypto space comes as the entire region is adopting crypto. However, it also comes amidst a debate in the Islamic world regarding crypto and the legitimacy of cryptocurrencies in Islam. Islam’s financial principles, defined by Sharia law, are what define the permissibility or prohibition of financial instruments. Some Islamic scholars have argued that the speculative attributes of cryptocurrencies make them non-permissible for Muslims. Such a view has led to the issuance of several fatwas (Islamic legal verdicts) by Islamic scholars from countries such as Egypt, Turkey, and Indonesia.
However, there is a train of thought that believes that because cryptocurrencies are devoid of any interest, they can be classified as permissible. They also emphasize the growing acceptance of cryptocurrencies to support their arguments further. An example of this debate can be seen in the stance adopted by some scholars when it comes to Ethereum, arguing that it is permitted. However, the Indonesian Ulema Council, the top Islamic scholars body, has declared that all cryptocurrencies are forbidden.
Muslim Nations Increasingly Adopting Crypto
Despite the ongoing debate, it is clear that Muslim nations have embraced cryptocurrencies in a big way and are among the biggest adopters of crypto in recent years. A study conducted by Chainalysis in 2022 identified the Middle East and North Africa regions as the fastest-growing crypto markets. Additionally, four out of twenty countries in Chainalysis’s Crypto Adoption Index are Muslim-majority nations. These have been joined by nations that have a significant Muslim population, such as Nigeria.
However, the regulatory framework in these countries is in stark contrast with one another. On the one hand, countries such as the United Arab Emirates (UAE) are creating a welcoming and conducive environment for crypto firms and enthusiasts. However, countries such as Turkey, while permitting cryptocurrency trading, restrict the use of crypto in payments and by financial intermediaries such as banks.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.