The rise of cryptocurrency trading in the UAE has raised questions about its recognition under Sharia law and its legal status in the Kingdom. Currently, the country's Sharia position on crypto is that cryptocurrencies are "neither halal nor haram." However, cryptocurrency supporters called it the "most Islamic form ever" during a recent conference in Abu Dhabi.

A scholar from the UAE Fatwa Council said, “Our current stand is ‘Tawaquf’, we cannot say whether it is halal or haram, but we say it is better not to get involved in it.” He explained that the issue is complex as there are many ways to analyze crypto. There are concerns about its speculative nature, as its prices fluctuate significantly overnight. This leads people to see it as an investment, and while some have made money, there are other risks involved, which is why it is not recommended right now.

bitcoin supporter

Supporters of cryptocurrency argue that the Muslim world is missing out on the bitcoin revolution. Financial expert, Sharia advisor and anti-money laundering specialist Arish Ehsan said governments around the world are increasingly interested in bitcoin. He said the next most publicised argument in favour of bitcoin is that it is outside the control of any government, unlike fiat currency. He said if its popularity continues to grow, every government will have varying degrees of control over it.

Claiming that bitcoin is more halal than fiat money, which is created when new loans are issued and involves riba (interest, which is forbidden in Islam), he said, “The problems caused by a faulty banking system are not related to a specific currency. These problems affect the entire economy and all currencies that can be exchanged.”

Legal Status of Cryptocurrencies in the UAE

Legal consultant Abdulrahman Al Nabhan explained that the legal situation regarding cryptocurrencies in the UAE is complex. The use and mining of cryptocurrencies for personal purposes is permitted, but the Central Bank has not yet enacted specific laws to legalize or prohibit commercial crypto investments. However, the lack of regulation does not mean that it is fully permitted, as businesses still require permission from the relevant authorities to operate commercially.