THE LEGAL STATUS OF BITCOIN IN THE SHARIAH PERSPECTIVE

Abstract

Money is the basic need and primary tool for human to fulfill their needs. It has been used as a medium of exchange in all over the world. Money has a very rich evolutionary history. Its journey starts from barter system and has reached to the digital shape known as Crypto currencies. Crypto currency is not only considered a big revolution in the history of currency but it also affected the Fintech as well. Bitcoin is the first crypto currency which was generated in 2009. Its legal monetary position is controversial as some countries accept it as a currency while other refused it as legal currency. Technical opinions have been given by the experts and the pros and cons have been explored from all around the globe. The established research regarding Shariah legitimacy of Bitcoin is much little. Therefore, the fundamental purpose of this research is an attempt to fill this gap by exploring the Shariah legitimacy of Bitcoin under the interpretation of indigenous Shariah scholars. The overall approach of the study is qualitative in nature while Phenomenology is adopted as a research strategy. The scope of the study is limited to the experiential views of Pakistani Shariah scholars, located in Peshawar the capital of Khyber Pakhtunkhwa province Pakistan. The research concluded that Bitcoin is not impermissible due to some legal issues attached to it. However, Shariah has not recommended any features nor has defined any characteristics for money. Also, it is not compulsory for currency to be physical. It could be physical as well as digital. The de-centralization and non-regulatory system of Bitcoin violates the rule “preservation of wealth” which is one of the prime objectives of Shariah. It could be declared dislike or non-desirable at most. It is recommended that the status of Bitcoin should be placed in front of international Islamic Fiqh Academy for its universal legetimize status.