Cryptocurrency adoption and investments stand low in Muslim countries, as individuals are still uncertain of its compliance with Islamic law. At the SCxSC Fintech Conference 2020 last week, Datuk Dr. Mohd Daud Bakar, a professional in shariah compliance, said that investors call for more time to consider cryptocurrency from the shariah perspective.
Bakar is presently the chairman of the Shariah Advisory Council at the central bank of Malaysia, Securities Commission of Malaysia (SC), and the Labuan Financial Services Authorities. He is also a shariah board member at a figure of financial institutions, including the Accounting and Auditing Organization for Islamic Financial Institutions, Morgan Stanley (Dubai), Bank of London and Middle East (London), Noor Islamic Bank (Dubai), Jadwa-Russell Islamic Fund (Saudi Arabia), and Salama Islamic Insurance.
In Malaysia, the SC Shariah Advisory Council has revealed that it is lawful for Muslims to invest in and trade cryptocurrencies, including bitcoin, on government-registered crypto exchanges.
Bakar explained that cryptocurrency is not considered as legal tender, but it is a legit commodity that can be exchanged within the market, as long as it is not backed by “ribawi items,” like gold and silver, the Malaysian Reserve reported. The publication quoted him as saying:
It is a medium of exchange, and we cannot stop people to use commodities as medium of exchange. It is as good as buying an e-ticket or commodities in the market.