Bitcoin Trading Forbidden Under Islamic Law: Egypt’s Grand Mufti

News, Regulation | January 3, 2018 By:

Egypt’s Grand Mufti Shawki Allam said that bitcoin trading is unlawful in accordance with Sharia, the religious law forming part of the Islamic tradition, due to the risk associated with the activity.

Shawki Allam is the 19th and current Grand Mufti of Egypt. The position of Grand Mufti is seen as very influential in Egypt, as well as throughout the Arab and Islamic world. The Grand Mufti is the government’s first and primary source of religious authority. The position is seen as the symbolic religious representative of the government, and is able to issue authoritative legal opinion (fatwa) on religious matters.

In his official fatwa, Allam stated that bitcoin is not considered safe because it carries with it several risks and isn’t regulated by a centralized authority. He added that bitcoin can have a “negative effect on its dealers’ legal safety, possibly due to failure to publicly disclose such operations,” which he said would lead to an ease in money laundering and terrorist financing.

“It has no set rules, which is considered as a contract annulment in Islam, that is why it is forbidden,” Ashour added.

Allam also said that both the “currency’s risk as well as its high profit potential undermines Egypt’s ability to maintain and stabilize its own currency.” He stressed that he met with economic experts to reach a final decision regarding the cryptocurrency by analyzing its effect on the economy.