GIFF2022: Modern Assets from Jurists’ Perspective

Kuala Lumpur (6th October 2022): Two prominent Shariah scholar unravelled whether modern assets in the likes of cryptocurrencies and NFTs (non-fungible tokens) are halal or haram for Muslims at Day 2 of the Global Islamic Finance Forum 2022. 

In the panel discussion titled, A Shariah Take on Metaverse Assets, Cryptocurrency & the Future of Value and Wealth, Sheikh Esam Mohamed Ishaq, a member of the High Islamic Council of Bahrain, and of the High Shariah Authority of the Central Bank of the UAE, said Muslims should not be dazzled by new technologies.

“Islam has a rule which recognises that assets must be a real asset. There are parameters in the real assets. We should not allow these fancy terms to mesmerise us, to distract us from the real subject. We have to let it come down to its core.”

Dr. Ziyaad Mahomed, Assistant Professor and Lead Researcher (Shariah) at the Centre of Excellence in Social Finance at INCEIF University, and Fintech Shariah Advisor, said the original premise of Shariah law is on permissibility, unless otherwise stated.

“When we are looking at cryptos or digital assets on the metaverse, we should look at it through the lens of permissibility. Going back to the ultimate objective of Shariah, it is the promotion of public benefit and the removal of harm.”

Sheikh Esam said the key control is whether an asset has intrinsic value or a store value like a fiat currency.

Scholars have differing views on modern assets. While some outright prohibit it, others believe that, as a basic Shariah maxim, everything is permissible unless it violates the agreed-upon maxims and controls.

Dr. Ziyaad argued that the metaverse, web 3.0, cryptocurrencies, NFTs, and other modern assets must ultimately be assessed on whether they cause more harm than good.  

He used the example of people investing their life savings in assets they didn’t fully understand in a market dominated by fear and greed.

“We, therefore, must constantly evaluate whether it will do more harm than good. Even if it has some benefits, we must rule it out if it causes more harm than good,” he said.

About AIBIM

The Association of Islamic Banking and Financial Institutions Malaysia (AIBIM) was established in 1995. Currently, AIBIM has 28 member banks and the association:

  1. Promotes sound Islamic banking system and practices in Malaysia.
  2. Represents the interest of members locally and abroad.
  3. Provides advice and assistance to members pertinent to the development of Islamic banking and finance at a local, regional, and global level.
  4. Coordinates human capital development initiatives.
  5. Promotes public awareness on Islamic Finance.

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