Is religion and cryptocurrency similar to oil and water? Is it true that never the twain shall meet? The answer would depend on which religion you’d ask. Christianity – the biggest religion in the world thanks to its more than two billion followers – has embraced cryptocurrency the same way it has accepted Jesus as its Lord and savior. However, Islam has yet to fully accept the use of digital currencies sans any doubt or guilt.
Christianity and cryptocurrency
The Christ Coin , touted as the first Christian cryptocurrency, is considered as the first Christian-based pre-mined cryptocurrency. Its 2017 white paper lists Luke Forstmann, George O’Connor, Simone O’Connor, Laura Brooks & Emmanuel Ogunjumo as its creators.
Though the coin describes itself as a cryptocurrency, its function is unconventional. Similar to Christ, though the coin belongs within the confines of the cryptocurrency world, it is not of it as the Christ Coin cannot be purchased in any way, manner or form. Instead, the coin needs to be earned. How?
According to the Christ Coin site, the currency “is used to financially reward people who read the Bible, post/view content and interact with the community on the Life Change Platform. The rewards may then be used to supplement personal income, invested for potential future gains, tithed to churches, or used to support global missions and humanitarian efforts.” Essentially, the coin is given only if one has done a good deed.
Another Christian-based cryptocurrency is BiblePay . Self-described as a “Christian Charity Cryptocurrency”, ten percent of its funds are given to charities, while more than 300 orphans are sponsored by the coin monthly. The site claims to use “proof of distributed computing” or PODC wherein “90% of (its) miners processing power goes to helping researchers find cures for AIDS/HIV, malaria, cancer, and Alzheimer’s.” It is also “ASIC and GPU-resistant” thanks to its mining-algorithm referred to as “Proof of Bible Hash” wherein “every miner has the entire KJV Bible integrated. This makes BiblePay virtually impossible to port to GPU or ASIC mining, making it CPU-only.” Besides its long term goal of helping orphans, BiblePay also aims to “provide a hedge against hyperinflation”.
Islam vs cryptocurrency?
Islam, considered as one of the major religions of the world, has been on the fence about cryptocurrency. Islamic scholars have different interpretations of the Sharia law – a set of Islamic law based on the Quran (the central religious text of Islam), and of the founder of Islam, Muhammad. Sharia law offers Muslims various principles on life, marriage, divorce, fasting, finance. The law is interpreted in many ways by numerous scholars thereby causing Muslims similarly various ways in which they practice its mandate.
Islamic law states that currency is only valuable when it is supported by gold or when it is government-legislated. It also prohibits one from engaging in speculation and gambling – two things cryptocurrency is currently well-known for. Based on such reasons, Shawki Allam, the highest Islamic religious leader in Egypt, issued a fatwa (a ruling on an Islamic law issued by a recognized Muslim authority) – on the first day of 2018 declaring that crypto trading is forbidden. He also cited the anonymity created by digital currencies as rife for criminal activities such as tax evasion, money laundering, or funding terrorist activities. Such a fatwa is considered an authoritative legal opinion within the Muslim community, though not a legally binding one.
However, an Indonesian fintech startup, Blossom Finance, declared otherwise. Their released report stated that cryptocurrencies such as Bitcoin is “generally permissible” under Sharia law due to it being based on Proof-of-Work compared to Fiat money which is based on debt. According to its CEO, Matthew Martin, traditional banks “operate using the principle of fractional reserve, which is prohibited in Islam.” However, Bitcoin “guarantees with mathematical certainty that the originator of the transfer owns the underlying assets.”
He adds: “Bitcoin is more halal (lawful) than any currency in wide circulation today but probably still falls short of the strict and narrow definition of money in Islam. Modern sovereign currencies are based on debt with usury – this is strictly prohibited in Islam. Therefore, all modern money is not halal. Bitcoin, on the other hand, is not based on debt – it’s based on a proof of work – and this is at least not haram (impermissible).”
OneGram, a start-up company founded last year, agrees with Martin. The company, with the goal of helping Muslims invest in cryptocurrency, issued a cryptocurrency backed by gold. Its aim is to make Muslims feel satisfied in the knowledge that such a currency complies with Islamic law.
Still, despite these efforts, no definitive stance has been issued by Islamic authorities with regards to cryptocurrencies. Harris Irfan, the managing director at London’s Cordoba Capital – an Islamic finance consultine firm – believe that the inherent complexities present in digital currencies, and the accurate understanding of these, poses a problem for numerous Islamic law scholars. Discussions are necessary according to the director of the Fiqh Academy’s Fatwa Department, Abdulqahir Qamar. He adds that seminars with Islamic scholars also needs to be organized to properly address numerous crypto-related issues.