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Digital Currencies Are Legit Commodities, Says Shariah Advisory Council’s Chairman At Malaysia Central Bank

The present chairman of the Shariah Advisory Council at the central bank of Malaysia and a shariah board member at numerous financial corporations recently commented that digital currency is a valid commodity that can be swapped.

Notably, Bitcoin and crypto espousal and investments continue to be low in Muslim nations as individuals are still uncertain of its acquiescence with Islamic law. Dr. Mohd. Daud Bakar, who is proficient in shariah compliance, recently attended the SCxSC Fintech Conference 2020. At the conference, he mentioned that investors require more time to comprehend virtual assets and cryptocurrencies from the shariah outlook.

In Malaysia, the SC Shariah Advisory Council has announced that it is acceptable for Muslims to invest in and trade virtual assets on government-registered digital currency exchanges. These virtual currencies include Bitcoin as well.

Bakar explained that cryptocurrency is not looked upon as a legal tender. Nonetheless, it is a legit commodity that can be swapped within the market, as long as it is not backed by “ribawi items,” including silver and gold, as per the report of the Malaysian Reserve. The news publication quoted him as commenting:

“It is a medium of exchange, and we cannot stop people to use commodities as medium of exchange. It is as good as buying an e-ticket or commodities in the market.”

He elucidated,

“This new development can open up so many interesting areas in Malaysia, in which crypto can be deemed as investment assets where people can buy and hold for trading.”

Bakar further mentioned that the Securities Commission of Malaysia has also made it conceivable for establishments to issue tokens as a way of raising capital, subject to certain limitations through its fatwa resolution.

What is your opinion about cryptocurrencies and digital assets? Do you consider them as commodities or securities? Let us know in the comments below!