Egypt’s Grand Mufti: Bitcoin is forbidden in Sharia law

Egypt’s Grand Mufti: Bitcoin is forbidden in Sharia law

Egypt’s Grand Mufti Sheik Shawki Allam has issued a fatwa against trading in cryptocurrencies. According to the religious ruling that technically does not have a legal binding, Bitcoin is forbidden by Sharia law, as it “causes harm to individuals, groups and institutions”, reports Egypt Today.

Furthermore, the Mutfti notes, the cryptocurrencies should not be used in transactions, because they are not recognized as a financial instrument by Egypt’s c-bank. The anonymity often associated with cryptocurrencies could lead to tax evasion, fraud, money laundering and financing of terrorism. The fact that the Bitcoin does not have a physical form can lead to fraud, resembling counterfeit money. Hence, Bitcoin is forbidden in Islamic Sharia as it leads to more corruption, because it is a decentralized and anonymous system and difficult to trace who gave how much to whom.

The Grand Mufti’s stance is much in line with that of the Egyptian Financial Supervisory Authority (EFSA) whose chief Mohamed Omran said that Bitcoin trading is illegitimate in Egypt, recommending that people refrain from buying or selling the digital currency, quoted by Egypt Today.

The stance was backed also by the Grand Mufti’s advisor Magdy Ashour who said bitcoin is forbidden in Islamic Sharia for the risks it holds, besides its usage as a tool to fund terrorism. “This currency is used directly to fund terrorists,” Ashour said, explaining that its transactions contain major damage to the economy. “It has no set rules, which is considered as a contract annulment in Islam, that is why it is forbidden,” he added.