Ethereum is halal but you should not eat or buy haram stuff with it just because the Shariah laws around currency do not apply to it…
Prominent Muslim scholars have released a whitepaper certifying Ethereum’s native cryptocurrency, ether, as Shari’ah compliant.
But it is not a Fatwa or ruling, it is only a finding with the conclusion that there is still the need to look at the purpose and nature of the smart contracts or applications built on the platform.
The Whitepaper says, “The Shariah analysis conducted during the research exercise has shown that Ether as the native cryptocurrency of the Ethereum platform meets the criteria to be considered a valuable asset or mal from the Shariah perspective.
“At the same time, its existence on the platform is one of the main requirements to ensure the blockchain functions as it is intended to be.
“Ether does not have any prohibited element such as riba, gharar and maysir, therefore it is a Shariah compliant asset.”
They could have said it in a less complicated manner. Or they could have added in their conclusion that, ‘Yes, Ethereum is halal if dot dot dot.”
But they are scholars and they are also among those who regularly update the ruling and guiding principles of ‘Islamic Banking’.
We do not believe in the current Islamic Banking system because it is mostly a change of badge from conventional banking.
So despite the big Arabic wordings such as gharar or maysir, we must still be wary of the Whitepapers.
Because in the end, they are saying cryptocurrency is halal but do not use it for ‘haram’ purposes.
Money, which is legal tender in all countries unless they are banned, is also halal but you, as a Muslim, should not use it for haram purposes.
However, in Islam, you should not earn money the haram way. The Whitepaper and other Fatwa’s and rulings on Cryptocurrency or Bitcoin and now Ethereum do not explain this aspect of the business.