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Business

Islamic authority in Kurdistan issues fatwa against cryptocurrency

By Rudaw 13/4/2018
A an undated AFP photo shows a conference on cryptocurrencies.
A an undated AFP photo shows a conference on cryptocurrencies.

ERBIL, Kurdistan Region — The KRG’s Supreme Fatwa Board has ruled against dealing in OneCoin, a type of cryptocurrency, most notably because of unknown sources dealing with it.

 

The board met in Erbil to discuss the issue after an inquiry by an individual. The board did summarize that virtual currencies in their current form are not in line with Islamic law, but only named OneCoin, omitting the most popular cryptocurrency, Bitcoin.

 

“Our board, following sufficient investigations and discussions, the following fatwa was ruled unanimously,” reads a statement from the board, which belongs to KRG’s Union of Islamic Religious Scholars.


OneCoin has been described by the NASDAQ as a “Ponzi scheme promoted as a cryptocurrency with a blockchain.” Its blockchain, or digital accounting ledger, is private and governments in Bulgaria, India and Vietnam have raided or seized assets in OneCoin offices. In 2017, the coin announced an initial public offering for investors in 2018, but that has yet to come to fruition. It is not currently possible to trade OneCoin for other digital currencies on major online exchanges.

“It is a virtual currency, and Islamic law does not approve of dealing in virtual currencies,” stated the fatwa published on April 5, but seen by Rudaw on Thursday. 

OneCoin is one of hundreds of digital cryptocurrencies which have emerged after Bitcoin gained widespread use and attention as the first decentralized digital cryptocurrency in 2009. Bitcoin differs in that its blockchain, or digital ledger system, is distributed across the internet. Bitcoin’s source code is also open, meaning anyone is free to change it. 
 
“Dealing in electronic currencies and their likes in the view of Islamic jurisprudence is complicated, prohibited and wrong for the following reasons,” the fatwa continued.
 
Another reason why virtual currency is not good, according to the fatwa, is its obscurity in terms of its source as the one issuing it is not known: “Jurisprudence does not approve of obscure dealings.”
 

The board also cited a lack of recognition by international financial institutions and banks as the reason why the cryptocurrency is not allowed to be dealt in.

 
“Lacking formal guarantees from relevant economic institutions, that is why any money spent in this regard goes to unknowns and is similar to gambling,” the board explained.
 
Gambling in Islamic law is considered to be haram, forbidden or proscribed.
 
“It does not fall into any lawful dealing so far, that is why we call on citizens to refrain from dealing in electronic currencies, especially OneCoin, because, as we said, it does not encompass any lawful principles,” the Fatwa argues.
 
The fatwa, nevertheless, does not entirely eliminate accommodating cryptocurrency in the future, saying whenever it is produced in line with Islamic laws and the above reasoning, it can be dealt in.
 
“The problem is not in dealing in with electronic business, but the conditions and its formulation,” the statement eventually adds.

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Newrozmovement | 13/4/2018
First of all, why do we have a fatwa board? If we want to e secular we should remove religion from government. Second, Islam does not say anything about crypto currencies because they didn't exist in the 7th century. Follow @newrozmovement on Twitter if you don't agree with the current status quo in the Middle East
turkish man | 13/4/2018
then tell your followers to ask their god to pay their salaries instead of 6i7chin ab8 it 24-7
Seba | 13/4/2018
Many experts here in Germany also warn against this cryptocurrency it is not safe.
Kurdistan | 13/4/2018
Let the stupid Islamic retards go back to stone age or to hell where they belong. They stupid ideologie about Islam they cannot impose on the Kurdish people. Let them do that in Arabistan to their Bedoin followers or Afghanistan. And the Kurdish Government should kick their ass and deport them. Or put them in jail forever.
duroi | 13/4/2018
In 1971, US abandoned Gold standard and except for ISIS coins, no currency is now based on gold any more and bitcoin is yet another currency, but unregulated and much riskier but to some extent trying to replace the role of Gold. The rulings on Gold-based money in early Islam and even on interest on those gold-based currencies no longer apply to 21th century non-gold bank notes. In many countries interests are paid below inflation rate and in the long term, the value of money "with interest added" is still lower than the value of the same money if kept in gold. Fatwas on economic & health matters by religions persons with no knowledge of economy and health must be delegated to the modern houses of Fatwas in special committees in legislation bodies of parliament and "expert mamustas" of economy and health in universities (cf Iran's failed fatwa based experiment).
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