Indonesia’s National Religious council has forbidden the use of cryptocurrency for Muslims, stating that the digital currency does not follow Sharia tenets and should not be used by Muslims.
According to a report by Bloomberg, the head of Indonesian Ulema Council Asrorun Niam Sholeh deemed that the online currency has “elements of uncertainty, wagering, and harm,” and therefore goes against the central tenets of Islamic law.
However, this does not mean that cryptocurrency trading is officially banned in Indonesia. But, Sholeh’s point does have far reaching implications, and may influence the take up of cryptos by local institutions.
It is worth noting that the Indonesia’s Ulema Council decides on Sharia compliance in the country, and it is often consulted by the finance ministry and central bank on Islamic financing issues. Meanwhile, Bank Indonesia has been mulling a central bank digital currency, with no decision announced as yet, the Bloomberg report added.
Interestingly, Indonesia has witnessed a surging interest in cryptocurrency adoption this year and ranks as the world’s top “crypto hotspot”, according to research by Coinformant. In Indonesia online engagement grew by 1,772 percent in 2021 as more people than ever searched for information about digital assets. “Indonesia is the world’s crypto hotspot of 2021,” researchers at Coinformant wrote. “Its interest in cryptocurrencies accelerated the fastest across the board.”
Further, Indonesia’s neighbor Singapore just saw its services halted from cryptocurrency exchange Huobi Global after the Chinese state crackdown.
So far, cryptocurrencies have been on a bull run since October. Ether, the native cryptocurrency of Ethereum, is at an all-time high, priced at $4,708.60. Similarly, Bitcoin hit $68,000 yesterday, beating the previous record high.