In recent times we have seen Mufti Muhammad Taqi Usmani’s fatwa declaring cryptocurrency-based purchases impermissible under Islamic law marks a significant moment in the ongoing conversation between faith and modern technology. His clear stance that cryptocurrencies are not recognised as maal in Shariah but rather as digital records addresses the ethical and legal ambiguities surrounding this new financial frontier. This ruling, confirmed by his son Hassan Usmani, serves as a profound reminder that Islamic scholars are actively engaging with contemporary issues, ensuring that religious guidance remains relevant in an increasingly complex digital world.
A Gate Opened for Scholarly Engagement
This fatwa opens a new gate for Islamic scholars to deepen their understanding of evolving technologies and financial systems. It highlights the importance of scholars becoming well versed not only in classical Islamic jurisprudence but also in the technical and economic dimensions of emerging innovations. This encourages greater collaboration between religious experts and specialists in technology and finance to develop informed perspectives that address modern challenges in a way that aligns with Islamic ethics.
The Case for Multidisciplinary Research
At the same time, Mufti Usmani’s fatwa underscores the need for extensive research across various fields of knowledge. Cryptocurrency and blockchain technology, while promising, pose questions that go beyond religious legality, touching on economics, law, and social impact. This calls for a multidisciplinary approach where scholars engage with experts from diverse backgrounds to thoroughly examine these innovations. Such depth of understanding will enable the Muslim community to navigate new technologies confidently and ethically.
What This Means in Practice
Ultimately, this ruling is a step forward in bridging faith and finance in the context of rapid technological advancement. It invites ongoing dialogue and scholarly inquiry, ensuring that Islamic teachings continue to provide relevant and thoughtful guidance. As the digital landscape evolves, so too must the frameworks that govern ethical financial practices.
For issuers and product teams, the practical consequence is that the characterisation question, whether a given digital instrument is maal, a debt, a usufruct or a bare record, now sits at the front of the structuring exercise rather than at the end of it. We address that analysis on our Shariah-compliant crypto and tokenization page, and the related instrument design questions on our RWA tokenization page.
Esquare Legal’s Shariah Advisory Board reviews digital asset and fintech products for Shariah compliance and coordinates certification with the certifying scholar. Contact us to discuss a product review.
Author: M Zakwan Hazarvi, Senior Associate, Esquare Legal.