MUI bans Crypto assets in Indonesia for Muslims commodity.
MUI bans Crypto assets
According to MUI or National Ulema Council, the use of crypto-asset as currency is forbidden for Muslim commodities.
This statement has come on behalf of Indonesia’s council of religious leaders. MUI has deemed cryptocurrency as haram or banned because it has wagering elements and harm. According to the head of religious decrees, Mr. Asrorun Niam Sholeh’s use of crypto is haram in the Muslim religion.
If cryptocurrency as a commodity or digital asset can abide by Shariah tenets and can show a clear benefit then it can be traded he added.
MUI holds the authority on Shariah compliance in the country that’s home to the world’s largest Muslim population with the finance ministry and central bank consulting them on Islamic finance issues.
The government itself has been supportive of crypto assets, allowing them to be traded alongside commodity futures as an investment option and pushing to set up a crypto-focus exchange by the end of the year. Indonesia doesn’t allow the use of the crypto asset as a form of currency, as the rupiah is the only legal tender in the country.
While the decision from MUI doesn’t mean all cryptocurrency trading will be stopped in Indonesia, the decree could deter Muslims from investing in the asset and make local institutions reconsider issuing crypto assets. Bank Indonesia has been mulling a central bank digital currency, with no decision announced as yet.
Crypto transactions amounted to 26 billion dollars in the first five months of the year in Indonesia, still a fraction of the global market at around $3 trillion.
The stance of Indonesia’s religious leaders may diverge from their counterparts in other Muslim majority countries. UAE has allowed crypto trading in Dubai free zone, while Bahrain has backed crypto since 2019.
There are other few Muslim commodity countries that have allowed the use of crypto trading, as it is one of the leading ways to increase earnings. Crypto is just like other trading asset and currency which has the same function as fiat currency.
