Tarjih Council, together with the Central Executive Tajdid Muhammadiyah (one of the most important non-governmental Islamic organisations in Indonesia), issued a fatwa against cryptocurrency usage, declaring that it is haram for Muslims.

On Tuesday, the fatwa (a decision on Islamic law) pointed to two issues that cryptocurrencies face, making them both illegal under Islamic law as an investment tool or medium for exchange.

1. Cryptocurrencies are not suitable as investment tools due to their speculative nature. The crypto tokens are believed to contain “gharar” (obscurity) which means they are not backed by anything like gold, which makes them unlawful under Islamic laws.
2. The standards for Islamic barter and medium of exchange laws don’t apply to cryptocurrencies. They must be legal tender that can be accepted by both sides.