the use and trade of cryptocurrencies It is prohibited by Muslim law, according to Indonesia's Ulema National Council, the semi-official body of Islamic scholars in the Southeast Asian nation who issue religious edicts.
The group, which receives funding from the Indonesian state but does not consider itself a government agency, considered cryptocurrency haram, or prohibited by Islamic law, because it has elements of uncertainty, gambling and harm, said Asrorun Niam Sholeh, head of religious decrees, according to Bloomberg.
However, if a certain cryptocurrency can show clear profit as a commodity or digital asset, then it would comply with the principles of Islamic law, the Islamic scholar added.
The decree was made after the council held an expert hearing, Bloomberg noted.
The Indonesian central bank declared cryptocurrencies an illegitimate payment instrument in January 2018, but did not completely ban the trade.
The council has a broad mandate to determine compliance with Islamic law in Indonesia, which is home to the world's largest Muslim population, roughly 231 million of the country's total population of some 270 million.
The various provinces of Indonesia adopt Shariah to varying degrees. Only the province of Aceh, for example, applies Shariah to criminal law: it criminalizes premarital sex, non-compliance with Islamic dress rules and other strict interpretations, punishable by spanking in public.
It's unclear what kind of punishment, if any, would be imposed for cryptocurrency trading, although the decree alone could deter Muslims from participating in the burgeoning crypto scene.
The decree could also prevent Indonesian-based banks from offering crypto services. Bank Indonesia, for example, has been considering launching a central bank digital currency, a kind of crypto that would be tied to the country's traditional currency, which is the Indonesian rupiah.
Indonesia's National Council of Ulemas has become increasingly influential over the past two decades, and the country's finance ministry and central bank have consulted the group on Islamic financial issues, according to Bloomberg.
The council's authority to regulate banking in the country was strengthened in 2008 with the passage of the Sharia Banking Law, which requires all Indonesian financial institutions to establish a financial division operating under Shariah law. according to the East Asia Forum.
