Bitcoin, which these days is referred to as an industry, has faced strong reactions from the government due to its high electricity consumption. Additionally, religious authorities have differing opinions on this matter.
Religious Ruling on Bitcoin
As long as this currency does not have a clear and precise backing—such as the support of a country’s central bank—it is considered without backing and value. If, according to economic experts, it threatens the national economy through money laundering or undermining sovereign authority, it is obviously problematic from a religious standpoint.
National currency is issued by the central bank of each country or region and carries official credibility. However, Bitcoin and similar currencies are created by miners (internet “miners”) based on specific mathematical mechanisms and general consensus, which grant them validity. Economic authorities in the country have issued warnings about this digital currency.
From a jurisprudential (fiqh) perspective, Bitcoin is considered a subject that scholars examine by taking insights from experts in different fields. They then apply religious rulings (derived from traditions) to that subject.
One important principle in Islamic economics is the “rule of Gharar” (excessive uncertainty or risk), which the Prophet Muhammad (peace be upon him) forbade. Gharar refers to ignorance or danger within a transaction. According to economic experts, the true nature of Bitcoin transactions is not yet clearly understood, and there is a high risk of loss and severe market fluctuations. Some experts describe it as a “currency bubble.”
One example of Gharar in this market is that there is no accountability or traceable responsibility. If something goes wrong for users, or if those controlling the network reduce the value of the currency, it is unclear what happens to the buyers.
You might say such fluctuations also exist in national currencies, but the response is that national currencies do not usually suffer such extreme fluctuations or lose their backing because their backing is the national sovereignty of a country—clear, certain, and controlled by the state.
In past years, examples like “Gold Quest” show how some schemes drained people’s money without anyone being accountable.
Ayatollah Makarem Shirazi: “Due to many ambiguities related to Bitcoin, trading it is problematic.”
Ayatollah Vahid Khorasani: “Buying and selling it is invalid.”
Ayatollah Shobiri Zanjani: “If using these types of currencies generally causes economic harm or violates law, trading them is problematic.”
Ayatollah Safi Golpayegani: “It is haram (forbidden) and a form of wrongful consumption of wealth. God knows best.”
Ayatollah Nouri Hamadani: “Engaging in transactions involving virtual currencies has religious problems.”
However, the Office of the Supreme Leader has neither explicitly prohibited nor permitted Bitcoin, so followers of the Leader should act with caution due to this lack of clear ruling.
Bitcoin is a cryptocurrency and a global payment system functioning similarly to fiat currency without backing. Legally, no country officially recognizes Bitcoin as legal tender.
Technically, Bitcoin was the first decentralized digital currency, operating without a central bank or authority. The network is peer-to-peer, allowing direct transactions without intermediaries.
Bitcoin was invented by an anonymous person or group known as Satoshi Nakamoto and released as open-source software in 2009. Its value has risen significantly in global markets from a few cents to thousands of US dollars.
The number of service providers and merchants accepting Bitcoin is growing. No one owns the Bitcoin network; users collectively control it, similar to email. Bitcoin’s functions are unique compared to other payment systems.
