Answered by Ustadh Salman Younas
There is a new digital currency trading in the market called Bitcoin. Is trading with bitcoins permissible?
According to some contemporary scholars, bitcoin is considered wealth, and possesses both legal value and the ability to act as a means of exchange. The Dar al-Ifta’ of Jami`at al-Rashid has recognized the above and permitted its exchange in countries where its usage is sanctioned. Mufti Faraz al-Mahmudi of Leicester also has a detailed research paper on the topic that can be found here.
Other scholars have cautioned against bitcoin’s legal status as money given its volatility although they have not conclusively asserted that it is necessarily incompatible with Islamic principles.
All in all, there is still much research required in the area of cryptocurrencies since this market is still in its infancy.
[Ustadh] Salman Younas
Checked and Approved by Shaykh Faraz Rabbani
Ustadh Salman Younas graduated from Stony Brook University with a degree in Political Science and Religious Studies. After studying the Islamic sciences online and with local scholars in New York, Ustadh Salman moved to Amman where he spent five years studying Islamic law, legal methodology, belief, hadith methodology, logic, Arabic, and tafsir. He is currently a PhD candidate at the University of Oxford and continues his traditional studies with scholars in the United Kingdom.