Abstract:
Money in Islamic and conventional perspective has specific requirements, and functions, such
as stability of its values, and is based on real assets. Crypto currency is a virtual or digital
money designed to use as a medium of exchange, a unit of account, and store of value to
facilitate financial transactions. But it is not yet issued by government. It is different from fiat
currency which is a real representation of wealth, and it is also different from e-money, which
is a digital representation of fiat money. There are divergent opinions among Islamic scholars
about the legality and permissibility of this future currency from an Islamic perspective. In fact,
final recommendations on this complicated issue are still to be undertaken. This research paper
intends to review how far crypto currency is permissible in Islamic monetary perspective to be
used as money. The work starts by defining the concept of crypto currency and its functions as
future money. It goes on to discuss the concept of money and its functions from gold and silver
money to fiat money and virtual or digital money. An important aspect related to crypto
currency in Islamic monetary policy is whether it qualifies or not to be used as a medium of
exchange, a unit of account, and store of value. This work attempts to show that crypto currency
does not deserve to be used as money because it has not been issued by the recognized
authority. Using inductive, and descriptive research methodologies, the author reviews several
works and fatwas that have discussed the legal issues related to contemporary electronic money
matters. This work goes further by identifying conditions that should be met in anything to be
considered as money in both conventional and Islamic monetary perspectives. The work
concludes by recommending that Islamic scholars take these observations into consideration
when issuing fatwas related to future electronic and virtual monies.
