Developing Shariah Screening Methodologies For Cryptocurrency

Abstract

Cryptocurrency is determined by the fact that it represents a fundamental component of a completely new model of financial relationships - Digital Finance. The characteristics of cryptocurrencies are that they have no intrinsic value, have no physical form because they exist only virtually through internet systems and networks, and the supply is not offered by any national bank. Therefore, the existence of such awareness has caused the community to think about or perceive the legitimacy of the use of crypto whether it is permissible (halal) or prohibited (haram). This research is purposed to discover the concept of cryptocurrency according to the Islamic perspective, the law of cryptocurrency based on the Islamic perspective, and what methods are used to measure Shariah compliant status in cryptocurrency. To answer these questions, the researcher used qualitative research methods such as descriptive and exploratory research; its resources are taken from secondary sources related to cryptocurrency. This paper uses thematic analysis, ATLAS.ti software programme, and triangulation to make the data more reliable and valid. The result shows that cryptocurrency as money is prohibited (haram) since it violates Shariah, yet cryptocurrencies are also deserving of being used as money (halal) because they satisfy the requirements for exchange transactions in addition to other criteria, such as mal (property) and user benefits but there is still no specific method to determine if this cryptocurrency is halal or haram.