April 25, 2024

Indonesia Forbids Crypto as a Currency

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As cryptocurrency goes mainstream across the globe there is still push back from certain countries for the mass adoption. You can’t blame them for pushing back a bit to protect their citizens, recently The Indonesian Ulema Council (MUI) sent down a ruling that stated that using any cryptocurrency, bitcoin included, as a form of payment for any product or service is illegal in Islam. However trading is allowed, so why not make money from trading and then benefit right?

So why is this a big deal , maybe that is because Indonesia is the world’s largest Muslim majority country so a ban there will trickle worldwide in those circles. The fortunate thing for traders of crypto in Indonesia is that they can still trade at will and invest at will but only via the commodities and futures market.

Their reasoning is that according to the power that be in Indonesia cryptocurrencies are forbidden according to Shariah law because they carry elements of uncertainty and harm, so that means using cryptocurrency as a form of payment is committing a crime pretty much.

Now here is the kicker in Indonesia, it’s the taste but don’t swallow syndrome, they see trading cryptocurrencies as a commodity unlawful because it does not meet Islamic rules. So they do allow trading of cryptocurrencies that have an underlying asset or carry clear benefits, this could rule out 90% of all Altcoins.

According to recent information the total value of cryptocurrency trading in the commodity bourse has reached 370 trillion rupiah ($25.96 billion) this year to May, according to the trade ministry. The total trading at the end of 2020 was valued at 65 trillion rupiah. The number of traders has reached 6.5 million up from 4 million. So there is an apparent demand for the trading because the volatility is making people a lot of money.

In the end it all comes down to the utility of any digital asset, if it is just issued with nothing behind it or no utility at all then it is a form of gambling, which is understandable. This is why investors in cryptocurrency need to be aware of what they are investing in because as you will read in Crypto Community there is a lot of scams that are on the rise.

UCW MAGAZINE NOV 2021

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