Last month, Amanie Advisors, a sharīʿa advisory firm specializing in Islamic finance, published a white paper discussing the permissibility of Ethereum according to Islamic Law. Ethereum, an open source, public, blockchain-based distributed computing platform, is powered by the currency Ether (ETH), a “utility token.” The Muslim scholars and financial advisors who collaborated on the white paper assert that owning ETH is ḥalāl. Amanie Advisors believes that the guidelines outlined in the paper will “serve as a catalyst to the Islamic finance market,” as well as create a space for the Muslim population to participate therein.
For Islamic law scholars, one of the primary areas of concern in cryptocurrency is whether or not ribā is present. In Islam, ribā (often referred to as interest or usury) is the process of lending money to profit from interest and is considered ḥarām, or religiously impermissible. On the ISLAMICLAWblog, Mohammad Fadel has considered whether ribā might serve a function extending beyond its definition as either interest or usury.