The crypto market’s volatile tendencies have kept Islamic countries from embracing the crypto craze. Some Islamic scholars have branded crytpo as “Haram” (or illegal). However other scholars disagree and have worked to prove that the digital currency is in fact “Halal” (legal).
The “Haram” vs “Halal” crypto debate has been ongoing since bitcoin’s initial surge of popularity some years ago. There are strict rules where money is concerned in religious texts that can be interpreted to support both parties’ arguments. The Muslim faith prohibits practices like lending for profit on interest, in addition to currencies that are not backed by anything of tangible value.
The religious community has made small strides in pockets to integrate cryptocurrency into Islam. For example, a mosque in the U.K. accepts cryptocurrency for alms-giving. More recently Islamic states seem to lean more towards adoption and integration. In April 2018 scholars deemed bitcoin ‘Sharia-compliant’. Muslims make up 23% of the world’s population and this has motivated fintech firms to want the Sharia-compliant stamp of approval.
X8 is an Ethereum-based cryptocurrency that is backed by fiat and gold. This helps to meet Sharia standards for digital currency. Islam requires that cryptocurrencies are valuable if society deems them valuable. This is a vague benchmark that has no quantifiable metrics. Cryptocurrency might only continue to be considered “Halal” if it can sustain perceived value in the public eye.