In the Name of Allāh,

the Entirely Merciful, the Especially Merciful

Praise is due to Allāh, Lord of the worlds, may the blessings and peace be upon our master Muḥammad, the last of prophets, on his family, and all his companions.

Resolution No. 237 (8/24) Electronic Currencies

The Council of the International Islamic Fiqh Academy of the Organization of Islamic Cooperation, holding its 24th session in Dubai, United Arab Emirates, on 7–9 Rabīʿ al-Awwal 1440h (4–6 November 2019),

Having reviewed the recommendations of the scientific symposium on Electronic Currencies, organized by the Academy in Jeddah, Kingdom of Saudi Arabia, on 10–11 Muharam 1441 (09-10 September 2019),

Having listened to the in-depth discussions on this subject,

Resolves

First: Concept, Dealing mechanisms and Risks

1. Given the general meaning of the concept of electronic currencies, which includes credit cards, prepaid cards, electronic cheques and others, dis- cussions concluded to use the term of “digital and coded (encrypted) ” Some of the most popular of these currencies include bitcoin, ethereum, and the ripple. Despite having notable differences, these cur- rencies are characterized by being encrypted, having no tangible physical existence or presence. Its transaction might be traded between parties without intermediaries, which is known as a peer-to-peer system.

According to the research presented, these currencies are classified into three types:

1. Coins, such as bitcoin.
2. Alternative currencies or altcoins such as light coin, bitcoin cash, ethereum and the ripple.
3. Tokens, which are tradable and exchangeable assets with goods and

One of the most significant characteristics of the first type of coins is decentralization, which means that, unlike other types of currencies, no government or private entity supervises its issuance. Most cryptocur-

rencies function on blockchain technology, producing the currency and maintaining the full record of currency transactions. Another charac- teristic of Bitcoin is the controversy over the personality of its first user (inventor).

2. Transactions in cryptocurrencies are processed directly via platforms avail- able online or through There are fees to use these platforms, and the client should have a personal electronic wallet on his own computer, to document his ownership of the cryptocurrency and his ability to deal with it.

One of the most distinctive characteristics of electronic platforms and wallets is the possibility of using pseudonyms, which is known as anonymity.

3. Some countries, such as Malaysia, have made it mandatory to obtain a necessary license from the relevant authorities to create these electronic platforms, and set in place regulations for their users, particularly disclos- ing their real identities.
4. Although cryptocurrencies have spread in many countries, in thou- sands of retail stores, have been exchanged for national currencies, and have been approved by some government authorities, many studies in- dicate the risks of using cryptocurrencies, particularly currency rates

Second: Shariah Ruling

After reviewing the research presented and after listening to the debates on the subject, it became clear that some issues are affecting Shariah rulings on cryptocurrencies, which still need further consideration, notably:

1. What is the exact nature of the cryptocurrency; is it a commodity, a ben- efit, an investment financial asset or a digital asset?
2. Is cryptocurrency considered by Shariah a real-valued property and a tradable item?

Third: In light of the above and given the significant risks associated with this type of currencies and the instability of their transactions, the Academy recommends pursuing research and studies on issues affecting its ruling.

Indeed, Allāh is All-Knowing.