Currency in Islamic Law
DOI link for Currency in Islamic Law
Currency in Islamic Law book
Cryptocurrencies such as bitcoin are being touted as the alternative to fiat currencies. For bitcoin to be considered a currency, it must possess the three characteristics defining currencies in Islam: mal, taqawwum and thamaniyyah. Bitcoin possesses features which give it desirability. For example, the blockchain technology behind bitcoin, the replacement of trusted party intermediations with the proof-of-work protocol, decentralisation, limited supply and borderless payments with fewer transactional fees make bitcoin desirable. Although bitcoin can be considered a currency from an Islamic-jurisprudential perspective, there are many questions and uncertainties in respect to bitcoin. With the lack of regulatory safeguards and complex technology, bitcoin has become an attractive prospect to prevent money laundering and illegal activity, as there is an extra layer of secrecy within the inustry protecting identity. The digitisation of the economy, which led to innovative payment methods, revolutionised the concept of financial intermediation, further contributing to the evolution of money and currency.