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A recent statement from an Islamic scholar that Bitcoin complies with Sharia law could be the cause of Soaring prices of $ 1,000 today, open up the market to Muslim investors who previously were unsure if the cryptocurrency qualified money according to the strict definitions described by the researchers.
Muslims make up 23% of the world's population, with 1.6 billion Muslims around the world, mostly in Asia-Pacific countries such as India and Indonesia. Sharia, or Islamic canon law, prohibits lending money at high interest rates, known as wear. The debate has raged since the popularity of Bitcoin in the Islamic scholar Scholar as to whether Bitcoin trading was a form of wear due to volatility and huge margins of profit and loss.
As the fastest growing religion in the world, Islam has become a central issue for financial authorities in recent times as the International Monetary Fund (IMF) has held its first formal discussion on the needs of the world. Islamic banking last year. In Islam, goods of intrinsic value (gold, silver, salt) are considered as money. Fiat's money is actually thinner than raw materials when it is to be considered as Islamic money – paper or paper money n & # 39; It is generally allowed that it is backed by a commodity of intrinsic value and a fixed exchange rate. The gold standard allows gold-backed currencies to conform to Shari'a, for example.
Bitcoin has been a hard currency to quantify, acting as a commodity and a currency at a time. However, it falls under some definitions of customary money in sharia – anything that becomes widely accepted as a motto by the company or the government's mandate.
Mufti Muhammad Abu Bakar, sharia adviser and compliance officer at Blossom Finance in Jakarta, issued a paper on whether Bitcoin is Halal (authorized) or Haram (banned) on Tuesday, April 10.
The paper essentially ruled that in some cases, Bitcoin may indeed be Halal, allowed.
Read this excerpt:
"In Germany, Bitcoin is recognized as a legal currency and is therefore called Islamic currency in Germany.In countries like the United States, Bitcoin does not have official legal monetary status, but it is accepted for payment from various traders, and is therefore considered to be customary Islamic money. "
Sharia law has strong ideas on preserving wealth, which has led the ICOs and the unstable market of cryptography to be viewed in a negative light. However, Bitcoin and Blockchain technology harmonizes well with Sharia ideology. The fractional reserve bank where the ownership of the money involved is considered wear and tear, which is forbidden. Because blockchain undeniably proves property, it is in fact more Sharia compliant than the bank, and all this has been included in the document published by Muhammad Abu Bakar. The decision comes just a day after a major conference of Islamic scholars regarding cryptocurrencies, demonstrating that this has become a pressing issue among the Muslim population.
As Muslims account for nearly one in four people in the world, the decision could open the market to many investors who previously avoided it for religious reasons, which we can already see with the recent rise in Bitcoin value. .
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