Ruling on Electronic Currency

Ruling on Electronic Currency

By: Dr. Haitham bin Jawad Al Haddad

Editor: Ustaz Sofyan Kaoy Umar, MA, CPIF

Praise be to Allah, Lord of the Worlds, and prayers and peace be upon our Prophet Muhammad and his family and companions.

There has been a lot of question about the rule of commerce in electronic currency cryptocurrency, and the most famous types of fabrication, and this paper trying to answer this question.

First, it is necessary to know what cryptocurrency, which can be defined as a highly encrypted digital currency, to protect its transactions, the most important of which is the so-called double spending, "which is money from nothing, As he puts it, "or to control the process of establishing new units; it is not done easily, or by anyone; in order to avoid counterfeiting.

In some countries, such as Japan and Sweden, it is now commonplace to use paper as an alternative or a substitute for paper money. Printing paper on paper costs money and effort. As the world moves towards the electronic age, instead of printing the currency on paper, Electronic devices stored on computers, but encoded in a very complex way, so that they can not be copied or "forged", and copies the paper currency.As in the paper currency, the dollar, the pound, the riyal, the yen, and so on, there are also forms of electronic currency, some of which are called Bitcoin, Lightcoin Etherum, and others.

Also, most of these currencies are not covered by any real money, gold, or even paper money. Some of the types that they claim are covered with some money, or perhaps gold and silver. In fact, I do not know how this coin is really covered With that money, but that cover is just a pledge from some of the parties that deal with them; to purchase them for money or tangible goods and this is a fundamental difference between the cover and the ability to buy, and this will be indicated. And the difference between them and paper currency: that the paper currency is mostly issued only by the central banks of the countries recognized internationally, the electronic currency has been issued from several parties and individuals, known and unknown, and has not - until now - to the laws and international legislation, and that There was a trend; therefore, smugglers and those in power used it as a substitute for paper currency and to bypass bank transfers under international control.

Also, the prices of these currencies fluctuate very dramatically in a short time, and are influenced by many market variables, some of which may be fabricated, while paper currency prices are often affected by the strength of the state economy and weak, and prices are not comparable in terms of stability. If this currency had not been accepted by a large segment of people, whether intended by its issuers or unintended, because it had little or no value; the origin of the cash was not acceptable as an intermediary for buying and financial transactions, To be used for large-scale buying and selling, not just for limited exchange based on the mere consent of the parties.

For example, if you exchange two, one gives clothes and the other takes food. Food and clothes are not considered money. But if we assume that certain clothes are accepted very widely to replace them with any other goods, Because it is clothing, but because it is a purse for money, sold and bought - to take the money, although this is an unrealistic reality, and I think it has happened in history only in limited times; the result of certain circumstances and non-permanent, Imam Malik since ancient times, the day that presumably said: "If people were leather between the course of the eye doubtful, I hated to sell gold or paper look."

Here I must mention the difference between what has real value in itself, and then treated as money sold and bought by it; its value as a comparison and approach to its real value, and not separated from them completely. And between what is not valuable in itself - as in the case of cash or electronic currency - the value of the paper on which the class of the hundred dollars, never comparable to the value of one hundred dollars, and this is a fundamental difference makes it impossible to measure before the people deal with him as a critical broker, It has a real value cover such as cash paper, and between people before it is treated as a monetary intermediary - like clothes - and has real value in itself.

And gold and silver - as critics - has accepted people to deal with them; where God deposited in the mushroom people accept them as a monetary intermediary, and yet they have value in themselves; so talk about them is another matter, and so distinct from others, and considered the law have special provisions, Exchange doors, and usury. 

Ruling on dealing with this currency:

A group of scholars and scholars have discussed the rule of this coin, but most of those who read their statements limited their words to one aspect of the issue and their death was one of its most important aspects. The most recent scholars have limited their "financial or monetary" to this currency, and based their judgment on whether it is in cash or not. Other provisions include the permissibility of dealing with it, ie, permitting the use of money, then running interest in it, and zakaah on it as is obligatory in cash, In paper currency.

Some researchers have said that their price volatility comes close to gambling that is forbidden by law. Some of them pointed to the ease of falsifying them somewhat, and then it is haraam to deal with them. Others also pointed to the possibility of their use in smuggling and international criminality; therefore, it is forbidden to deal with them. Most of these are side-effects that may affect governance, if not the cause. And they have concluded that if the flow of banknotes took place, so that it was recognized by all the countries of the world or most of them, and dealing with them is subject to rules and laws that prevent circumvention; Then it is permissible.

And a few scholars with experience in the economy in its rule, and stated that what had a cover in gold or other money in kind, it may take the rule of permissibility, and those who raised their voices and highlighted the issue of gold cover and its impact in the global economy; so that this problem one of the most important axes Search process in its judgment. And before we talk about being money or not, and to understand the issue of gold cover and its impact on the rule of dealing with this type of currency; we must reflect on its origin and how to appear; Numbers, or perhaps electronic forms, written, drawn or programmed by a user of computers; they have no tangible origin, no material extracted from them, there is no real cost in creating only electricity consumed in the operation Those computers, and the time spent by the coder in writing them!

In other words, we say that this type of currency or currency is made or created from nothing, and this goes back to remind us of the state of monetary paper after the disengagement between it and gold, which was done by the United States of America in 1971, known as the shock of Nixon; Until then, the notes were covered with gold, or for transfer: the notes were a title to the amount of gold; so I used to write the words that the exporting country was committed to paying gold, Its worth the paper currency of the holder of those securities, when the United States ended that link, no longer gold cover for the dollar, have taken place other countries like this. This means that countries can make money from nothing but the paper that has been printed on it, and this is what has already been done. States are printing their currency on paper without having any cover of gold or silver, or even other money.

Many Western economists spoke about this transformation and promised it one of the biggest economic events in the world. Some of them spoke of its dangers, but because it was a US decision that blinded many people to its dangers, and weakened the voices of those who realized its danger from the economists of the West. As well as the voice of the Islamic nation, represented in Islamic countries!

I may not be exaggerating if I say that this transformation is the basis of the calamities that have taken place in the whole world, economic scourges varied, and I found - in the limits of my humble research - the disclosure of the seriousness of this decision and its link to the control of a few of the rich and powerful economy of the world, With all the economic problems the world suffers. This is an attempt to clarify the truth and seriousness of this the decision, and then link it to what is now known as the encrypted electronic currency.

In fact, this decision is a breakthrough for the so-called "money creation" or "money creation" of nothing, creation of money - although the most precise phrase is the creation of money - which takes place in several forms: All these images would not have happened if the paper currency were real bonds linked to gold and silver, or any other real money.

The printing of the dollar, for example, which is a strong currency - or is the strongest so far - bought and sold, is nothing but the creation of money from nothing, the dollar was made from nothing; because of it no longer support the ownership of gold, but no longer a pledge of ownership of Of any other real money, or in other words: the disconnection with gold, or real money and this is a matter and obligating states to their citizens or commitment to them to consider their currency in cash sold and bought, and accept it instead and financially.

Thus, the nations of the world were able to find money from nothing. They became free and unrestricted by the king of gold and silver. They were able to "manufacture" their own gold and silver from nothing. No one would hold it accountable. The stronger the military and political state, , And then managed a few influential people to control the economy of the world through the imaginary money does not have a reality, taking advantage of their strength and influence, but the weak countries, what makes it money is weak money is not Has no power except through its association with the dollar, even if it is rich in natural resources of gold or silver, and the dollar - as we mentioned - has no real balance or cover!

One of the most important signs of the difference between the fact that the paper currency is real bonds either gold or silver, or other real money, and the paper that the exporting countries are obliged to consider as a financial alternative - to get inflation, an increase in money supply in exchange for what should be represented by goods, Money was a true bond of real money for inflation. As is well known, inflation is one of the biggest economic problems facing the world, especially the weak ones, Natural Hb most important wealth!

The Prophet (peace and blessings of Allaah be upon him) said in the famous hadeeth, which is the most important hadeeth in the section of riba: "( gold) In gold, silver in silver, wild in the wild, barley with barley, dates with dates and salt with salt, for example, by analogy, whether by hand or by hand. If these varieties differ, Sell ​​if you like, if it is hand in hand)).

Handling is the powerful, solid means to prevent this process, ie, creation of money , which occurs when gold and silver exchange the basis of money, the only criticisms of Islamic law, through promises between the two, even if these promises are documented On paper, or through the exchange of title deeds for gold or silver, and those promises or deeds of title are what is then known as banknotes.

And the creation of money prevents him from dealing, as stipulated in the previous talk, and these two processes - the usury and the creation of money - are closely linked to each other, so the deal that prevents usury is achieved only if the money is real. And the problems of multiple, and the basis of the imbalance created by God Almighty and the universe, and the distribution of livelihood; God Almighty and the livelihood of some of the country gold, and some non-gold, if made gold - or criticism - from not Something, this imbalance and this divine justice have been disrupted, replaced by the injustice practiced by the strong who does not believe in God, and rebelled against his authority: " No man is to be overwhelmed, that he has seen him be saved." [Al-Alq: 6, 7]

The creation of money gives an opportunity to find imaginary money that has no cover. Rather, as in the encrypted electronic currency, the limited number who have the skills to make money from acquiring wealth, and perhaps monopolizing it, and being unregulated is a wide door to cheating and deceit; Real money can be assessed, and then its prices can be manipulated and controlled, and this uncontrolled value jumps up and lowers at a slow time, and happens because of this unrealistic money buying double-p Of times, Vijlq of this virtual money and another imaginary money, however, enacted laws to control this process, it becomes the general economy or the economy of that market bubble does not explode soon updated massive destruction.

Unfortunately, the issue of creating money did not take enough time to research and study by Muslim jurists, although it is often a reference to riba, some of its images and ramifications extend to what does not extend images of usury and ramifications. Based on this, any creation or creation of money from nothing is prohibited in the law; it is an attack on the Creator's right to create. He alone is the greatest of all that exists of nothing (not creation and matter) [customs: 54].

If the Muslim world had a presence on the world stage, and the the world economy, it was not authorized to disengage between gold and paper currency, and insisted that the banknotes are just bonds of title to the equivalent of gold, and to refrain from Islamic countries to deal with this imaginary money made by the unjust forces Of human beings, and resisted the use until the last shaft before falling victim to him and to those who made it! 

Ruling on electronic currency not covered by any type of money:

This encrypted electronic currency is another picture of the money industry that has no cover. As we have mentioned, it is now manufactured by individuals or companies and countries. It has not yet been adopted for international dealings, and it may soon be done; to replace the paper currency, ; False criticism has no financial cover, as well as have a cover of the two real critics: gold and silver. Therefore, the industry of this cash known as cryptocurrency, whether it is beginning or through the so-called exploration operations, is prohibited because it is the creation of money from nothing - as it is advanced. It is also forbidden to pump money to strengthen it through the sale and purchase.

If the currency becomes a substitute or a substitute for the paper currency, and the countries or central banks or legal entities exporting it are obliged to dispose of it of their value from any types of goods or local produce, such as a dollar, a dollar, or other US currency equivalent to the dollar, Any dollar, has a specific exchange rate, as in the case of the dollar; if the currency became a substitute or a replacement for paper currency, and imposed on the countries of the world - including the Islamic countries - "instrument" Or a decline in paper currency, and can be set at a specific exchange rate - with a high or low, as in the paper currency - is not subject to large fluctuations and fast, which makes it a kind of gambling legally prohibited; and enacted enough legislation to ensure the continuation of dealing first, Secondly, it may be said that it is permissible to deal with it, and it is now permissible to deal with cash, which is forced, and becomes a similar alternative to it, even though its origin - that is, cash paper - Gold is prohibited.

The Islamic countries should strive - if they want to independence their economy and extend justice to the land - to avoid selling their wealth in return for paying through these currencies so as not to pump more power in them, but to sell their wealth with real gold or silver, or through swaps with movable money.

Ruling on electronic currency covered with gold:

As I mentioned earlier, it is inconceivable that some of these currencies so far covered with a real cover of gold, and most of the matter, some of the issuers pledged to pay the original value gold, and we have to confirm this pledge, and is a mere literary commitment, or a binding commitment of Through its subordination to a stable and recognized law.

On the one hand, and on the other hand: it must be priced in proportion to the price of gold; to verify the credibility of this cover, and if so it must refrain from dealing with them separately between them and the gold covered by the auction in the price; It has changed but it is a limited change compared to the time it takes to change. If the price of these currencies fluctuate significantly in a short time, this indicates first that there is no real cover for gold. Here CSIR; so as to the approach of that deal by buying and selling of gambling forbidden, as we mentioned earlier.

It goes without saying: that if the gold cover is proven by these restrictions, it does not become an independent currency, but the fact that it is a title to gold, and then subject to the provisions of exchange known, and do not prolong it; because I mentioned this possibility, otherwise I do not think it is a reality Real, at least until this time. 

Ruling on electronic currency covered with other types of money or movables:

As I mentioned earlier in the rule of the currency covered with gold: It is inconceivable that some of the images or types of this currency covered with gold, so is the case for the cover of money and other movables, but the impossible here stronger. In any case, if the imposition of a kind is covered by other types of money - such as land, real estate, etc. - this currency can only be a title to that property, and then we have to deal with it as title deeds, Unless it is settled as cash, and then we have to look at the new ruling as it progresses, and it says what was said in the predecessors of the achievements; to avoid entering the facilitator when dealing with them.

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* Dr. Haitham bin Jawad Al Haddad is a British Muslim scholar of Palestinian origin. Al-Haddad sits on the boards of advisors for Islamic organizations in the United Kingdom, including the Islamic Sharia Council. He is the chair and operations advisor and a trustee for the Muslim Research and Development Foundation.