Is Bitcoin Halal in Islam? Yes, and Now Ethereum is Too
Last week brought good news for people looking to buy Ethereum, as Muslim scholars declared the coin Halal.
About a year and a half ago, the question of “Is Bitcoin Halal?” was mostly settled. Bitcoin was declared permissible under Sharia Law, assuming it was also permissible in the jurisdiction in question (meaning permissible by the local government), and that it wasn’t being used for activities that aren’t permissible under Muslim law, opening the door for Muslims around the world to buy Bitcoin. The announcement even brought with it a brief spike in the BTC price, causing it to rise by 1000 USD over the course of an hour. So the announcement that Ethereum is Halal is great news for anyone who wants to buy Ethereum.
Is Bitcoin Halal? Why it matters.
The question of whether or not Bitcoin is Halal is not only important to observant Muslims, it’s also one that perplexed the Muslim community for some time. Sharia Law is the set of rules that govern Muslims, and the Sharia courts weigh in on almost everything declaring it either Halal (permissible) or Haram (forbidden). According to Sharia Law, usury—or lending money at unreasonably high-interest rates—is Haram. Similarly, making profits on entirely speculative entities is also Haram. On the other hand, making money through profits on physical entities is permissible. Why that matters when it comes to Bitcoin, is in the coin’s non-physical attributes. Because BTC isn’t a tangible entity, its status as a currency, investment, or otherwise isn’t always clear.
On the one hand, Bitcoin is very much currency, and it’s used to trade goods. On the other hand, a large majority of people who own BTC, are using it as a speculative investment, hoping it appreciates in value and then selling it at a profit. Which is why Sharia Law has been murky on the subject. If you buy Bitcoin and then sell it at a higher price, thus making a profit, are you breaking Sharia Law? For observant Muslims, knowing whether they are acting in good faith when they buy Bitcoin is crucial.
Is Ethereum Halal?
Ultimately, it was decided last year that Bitcoin is Halal, with the caveats mentioned above. Other cryptocurrencies, which have found less success as real-world currencies and are still mostly speculative, were less lucky. Which is why the fact that Muslim scholars have now decided Ethereum is Halal as well, is great news and opens up the door to Muslims around the world to buy Ethereum, provided doing so is also legal in your country.
How to buy Ethereum
If you want to buy Ethereum, you can do so with Coinmama in a few easy steps.
Sign up for a Coinmama account. Go to coinmama.com/signup and fill out your first and last name, email address, and choose a password. Coinmama serves 1.5 million users in more than 190 countries worldwide. However, there are some countries we can’t serve due to regulations. Before you sign up, check out the list of countries we operate in.
Verify your account. Coinmama takes account safety and security seriously. Look for a link by email to confirm your account once you register. Click the link to be guided through our account verification process. You’ll be asked to provide a copy of your photo ID as part of our verification process. This helps us keep your account—and the blockchain—safe.
Buy Ethereum. Click “buy” and “Ethereum” to be directed to our Buy Ethereum page. Choose the ETH amount you want to purchase and the currency you’d like to pay with. Then click “Buy now.” Enter your Ethereum wallet address. Note that Ethereum wallets are different from Bitcoin wallets, and each will have its own unique wallet address. An Ethereum wallet will start with 0x. If you need to set up a wallet, read more here. You will now be directed to the payment page. Choose if you’d like to buy Ethereum with credit card or bank transfer, then follow the instructions to submit your payment. Once your payment is approved, you should receive your coins within about fifteen to thirty minutes.