A popular Saudi cleric has ruled that under Islamic law, digital currency bitcoin is prohibited in Islam because is it “ambiguous” and provides anonymity to criminals.
Jeddah-based cleric Assim al-Hakeem made the comment during his show “Ask Zaad.”
“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 (forbidden) money,” he said.
Hakeem added, “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.”
During the segment, he also said that scholars in the past didn’t discuss the issue because it is “a new thing.”
“Bitcoin is something that is recent and new and there are a lot of serious concerns when it comes to dealing with it ... whether it's from the origin or from the aspect of sustainability and security,” said Hakeem.
While questioning the recent spike in the cryptocurrency’s value, he said, “As of today, one bitcoin that was [worth] 0.1 cents is now equivalent to $11,000 plus. This is ridiculous. This is not something physical you can touch.”
He also urged Muslims not to get involved in such dubious activities.
“Muslims should not get involved in such dubious transactions simply to make a quick buck, to make a quick profit. This is not an Islamic concept,” the cleric said.
Interestingly, Hakeem isn’t the only one who holds such views.
Recently, Turkish’s authorities also warned its citizens from buying the currency because it didn’t comply with Islamic laws.
“Buying and selling virtual currencies is not compatible with religion at this time because of the fact that their valuation is open to speculation, they can be easily used in illegal activities like money laundering and they are not under the state’s audit and surveillance,” said Diyanet, Turkey's Directorate of Religious Affairs.
Prominent member of the Saudi royal family Prince Alwaleed bin Talal, who has worked diligently toward building — mostly financial — ties with the West, especially the United States also shares the same views.
While talking to CNBC in October, the now-arrested prince said the bitcoin will “implode” one day.
“It just doesn't make sense. This thing is not regulated, it's not under control, it's not under the supervision of any central bank. I just don't believe in this bitcoin thing. I think it's just going to implode one day. I think this is Enron in the making,” he said.
According to Steve Grob, director of group strategy at Fidessa, as a virtual currency, bitcoin can be used to move money around the world without the need for a central authority, such as a bank or government.
Thumbnail Credits: Reuters, Dado Ruvic