FILE – Egypt’s Grand Mufti Shawky Allam
CAIRO – 31 December 2017: Counsellor of the Republican’s Mufti, Dr. Magdy Ashour, said that Bitcoin is forbidden in Islamic Sharia for the risks it holds, besides its usage as a tool to fund terrorism.
The mufti’s counsellor issued a Fatwa (Islamic ruling) that the virtual currency should not be used to make financial transactions because it has no monetary cover by the Central Bank of Egypt (CBE), which means it is not guaranteed.
“This currency is used directly to fund terrorists,” Ashour told Egypt Today on Sunday, explaining that its transactions contain major damage to the economy. “It has no set rules, which is considered as a contract annulment in Islam, that is why it is forbidden,” the counsellor added.
Bitcoin is a type of crypto currency independent of traditional banking; Bitcoin started circulating in 2009 and has become the most prominent of several fledgling digital currencies, according to Reuters.
The virtual currency relies on a network of computers that solve complex mathematical problems as part of a process that verifies and permanently records the details of every bitcoin transaction made.
Ever since it became known in Egypt in August, the virtual currency stirred controversy over its legitimacy, since most of Egypt’s 93 million people have no bank accounts. But even though electronic payments have grown in recent years, electronic banking in Egypt lacks regulations for digital currency. This means local retailers cannot accept it as payment, but users on an exchange may be left to trade freely, potentially cashing in on its ascent.
On December 17, Head of the Egyptian Financial Supervisory Authority (EFSA) Mohamed Omran announced that Bitcoin trading is illegitimate in Egypt, recommending that people refrain from buying or selling the digital currency.
Dar al-Ifta had warned against the digital currency, saying that it gives extremists a chance to receive funding, especially after the government’s crackdown against them and cutting out their resources.
Many governments globally are mulling how to regulate and classify Bitcoin, a volatile digital currency that has captured the interest of speculative investors worldwide as its value has soared, roughly quadrupling since the start of 2017 and trading at around $18,000 on the Luxembourg-based BitStamp platform. It has soared by roughly 1,700 percent so far this year.