Crypto In Islam: Halal Or Haram? Full Analysis 2025

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Cryptocurrency can be halal or haram depending on how it is used. Spot trading of established coins like Bitcoin and Ethereum is viewed as halal by many Islamic scholars, as it involves direct asset ownership without interest (riba). However, speculative practices such as staking, futures, and margin trading are generally regarded as haram. In 2025, about 60% of Muslim-majority countries allow regulated crypto trading under Shariah-compliant frameworks, which is a good enough guideline for anyone considering whether cryptocurrency trading is halal or haram in islam.

Cryptocurrency has gained widespread acceptance and has become a part of many modern economies. Yet, an important conversation continues within the Muslim community: is investing in cryptocurrency halal or haram in islam? Islamic finance follows well-established principles derived from the Quran, guiding Muslim investors toward ethical and Sharia-compliant financial activities. This article reviews the foundations of Islamic finance, carefully examines different scholarly views on whether cryptocurrency is permissible, and explains how Muslims can approach crypto trading while respecting the tenets of their faith.

Risk warning: Cryptocurrency markets are highly volatile, with sharp price swings and regulatory uncertainties. Research indicates that 75-90% of traders face losses. Only invest discretionary funds and consult an experienced financial advisor.

Is cryptocurrency halal or haram?

Is crypto halal or haram?

Cryptocurrency can be halal if it involves real economic activity and avoids prohibited elements like riba and excessive uncertainty. Though it must be noted how blockchain systems affect whether it fits within Islamic rules. Proof-of-Work (PoW) models like Bitcoin use real-world energy and actual effort, which scholars often say is closer to earning money the halal way.

But Proof-of-Stake (PoS) models, like the one Ethereum uses now, let people earn just by holding coins, and that can sometimes look like riba depending on the rewards. A 2023 study from the International Islamic Fiqh Academy is widely discussed for how it showed that buying crypto is halal or haram in islam depending heavily on whether a coin is created through real work or just speculation.

Scholars also take note of how risky the price swings are. In a 2024 report by Amanie Advisors, over 67% of top cryptocurrencies were found to have a kind of risk that Islam usually doesn’t allow in contracts. This doesn’t mean all cryptocurrencies are haram, but it does mean that coins tied to real-world projects, assets, or services that help society have a better chance of being halal. Understanding these small but important differences really matters before investing.

Why some scholars consider cryptocurrency halal

Why some scholars consider cryptocurrency halal:

Understanding why cryptocurrency is seen as halal by many scholars needs a deeper look beyond just surface-level arguments.

Crypto fulfills asset-based transaction rules. Some cryptocurrencies, especially those with limited supply like Bitcoin, behave more like real-world assets you can trust, fulfilling a key part of halal crypto criteria.
Peer-to-peer structure reduces haram involvement. Since crypto transactions often happen without middlemen like interest-based banks, they make it easier to avoid interest-based traps.
Smart contracts offer transparency. On-chain agreements let everyone clearly see the terms before committing, following what Sharia-compliant crypto guidance expects in open, clear deals.
Intrinsic utility boosts halal arguments. Coins that actually do something useful, like running a blockchain or powering decentralized apps, give something real instead of just hype, fitting the spirit of Islamic ethical standards in crypto.

Why other scholars consider cryptocurrency haram

When beginners explore Islamic finance, they often get surprised by how sharply scholars differ when it comes to crypto's halal status, and understanding why can make all the difference.

Crypto lacks intrinsic value. A lot of scholars point out that most cryptocurrencies aren’t backed by anything solid, which reminds many of the financial bubbles we’ve seen before.
Unregulated markets create gharar. Crypto markets are often wild and without proper checks, and this crazy amount of unpredictability is a serious red flag in Islamic contract rules.
High exposure to prohibited activities. Many crypto platforms run interest-based loans, gambling setups, or staking that mirror riba, sparking big arguments about halal vs haram cryptocurrency.
Speculation overshadows utility. Scholars believe that when most of the action comes from quick trading instead of real-world use, it becomes harder to defend why cryptocurrency is halal in islam without pushing the limits of what’s considered right.

Main principles of Islamic finance

These principles form the foundation of halal crypto standards and are crucial for investors who want to follow Shariah-compliant financial practices:

Prohibition of riba (interest). Interest is strictly forbidden because it can lead to exploitation. It is well known that scholars who discuss whether crypto trading halal or haram in Islam often stress that any transaction involving interest-bearing elements does not align with Islamic law. This principle is particularly emphasized by scholars when assessing “is cryptocurrency halal” according to hanafi perspectives.
Avoidance of gharar (uncertainty). Excessive uncertainty or ambiguity in transactions is not allowed. A key aspect in evaluating whether cryptocurrency is halal or haram in Islam is to ensure that agreements are clear and transparent, minimizing gharar. Scholars from various schools, including those who want to know the answer to “is cryptocurrency halal” as per salafī guidelines, stress the importance of eliminating ambiguity.
Prohibition of maysir (gambling). Any financial activity that resembles gambling, where outcomes depend on luck rather than effort, is prohibited. This concern often arises when examining whether cryptocurrency is halal or haram in Islam according to ethical investment standards.
Investment in halal ventures. Investment opportunities must involve businesses considered permissible under Islamic teachings. This rules out companies associated with alcohol, gambling, pornography, tobacco, and other haram activities. Investors seeking to adhere to Islamic principles while exploring crypto must ensure that their investments support halal industries.
Profit and loss sharing. Muslims are encouraged to participate in ventures where both profits and risks are shared fairly, following the concept of justice and equity in Islam. Those wondering “is investing in cryptocurrency halal or haram in Islam?” must prioritize investments that involve shared risk and mutual benefit to maintain full Shariah compliance.

Crypto trading and Riba (Interest)

One of the key concerns in Islamic finance is the issue of riba. Scholars issuing a fatwa on cryptocurrency have consistently stressed that receiving rewards resembling interest, such as staking rewards, goes against the principles of Shariah. For example, the Mufti Taqi Usmani’s fatwa on bitcoin highlights that if crypto trading results in gains similar to interest without a genuine exchange of assets, it is considered haram.

Halal vs. haram cryptocurrencies

Not all cryptocurrencies are considered equal under Islamic law. Let’s break down which are generally accepted as halal and which are viewed as haram.

Halal cryptocurrencies

Cryptocurrencies considered as Halal function as a medium of exchange without speculative or interest-based elements. Examples include:

Bitcoin (BTC). Widely accepted as a payment method and viewed as a digital asset with inherent value.
Ethereum (ETH). Although it enables DeFi (Decentralized Finance) and smart contracts, (Decentralized Finance) and smart contracts, spot trading of of Ethereum is generally seen as halal.
Binance Coin (BNB). Used within the Binance ecosystem and often seen as a utility token.
Litecoin (LTC). Known as the “silver” to Bitcoin’s “gold,” Litecoin functions as a payment method and is generally permissible.

Note: Please keep in mind that these cryptocurrencies are considered Halal because they provide utility beyond just offering staking returns. However, if a trader decides to stake them to earn passive returns, it will be classified as a Haram activity according to Islamic financial guidelines for crypto.

Haram cryptocurrencies

Some cryptocurrencies fail to meet Islamic finance standards due to their speculative nature or involvement in activities deemed haram. Examples include:

SushiSwap (SUSHI). A decentralized finance (DeFi) token that may involve interest-based returns.
Uniswap (UNI). Another DeFi token associated with staking and earning interest.
Kusama (KSM). Known for high volatility and uncertainty, which leads some scholars to classify it as haram.

Halal vs. haram cryptocurrencies
Criterion	Halal Cryptocurrencies	Haram Cryptocurrencies
Underlying Value	Backed by real assets or legitimate projects	Purely speculative tokens with no intrinsic value
Usage Purpose	Used for lawful transactions and investment	Associated with gambling, prohibited goods, or fraud
Speculation (Maysir)	Minimized or controlled	High speculation and extreme volatility
Volatility	Moderate, based on real market demand and supply	Artificially driven by market manipulation
Contract Structure	Transparent, fair agreements without hidden conditions	Unclear terms with high levels of gharar (uncertainty)
Connection to Riba (Interest)	Absent — no structures generating interest income	May include interest-based structures or profit mechanisms
Shariah Audit	Reviewed or certified by Shariah advisory boards	No Shariah oversight or clear violations
Examples	Bitcoin (disputed, depending on use), utility tokens	Casino tokens, some meme-coins without real use cases

Guidelines for halal cryptocurrency investment

For Muslims aiming to invest in cryptocurrency while adhering to Islamic principles, it’s crucial to follow these guidelines:

Focus on platforms offering Sharia-compliant crypto guidance

For Muslims aiming to invest in cryptocurrency while adhering to Islamic principles, it is important to understand whether investing in cryptocurrency halal or haram in Islam. It is also important to focus on platforms that provide Sharia-compliant crypto guidance. Carefully research the cryptocurrencies and exchanges you intend to use, ensuring they align with Shariah principles.

Also, verify that the projects meet basic halal crypto criteria and avoid supporting haram activities such as gambling or interest-based returns. To assist you in this process, we have compared the t op crypto exchanges with listed halal cryptocurrencies in the table below.

Best crypto exchanges with halal cryptocurrencies
	Foundation year	Coins Supported	Spot Fee Tier	Min. Deposit, $	TU overall score	Open an account
OKX	2017	329		10	8.9	Open an account Your capital is at risk.
Kraken	2011	278		10	8.48	Open an account Your capital is at risk.
Crypto.com	2016	250		1	8.36	Open an account Your capital is at risk.
CoinMetro	2018	72	Level 0 (Regular Fee)	1	7.41	Open an account Your capital is at risk.
Ledger Wallet	2004	1817			7.3	Open an account Your capital is at risk.

We at Traders Union have over 14 years of experience in financial markets, evaluating cryptocurrency exchanges based on 140+ measurable criteria. Our team of 50 experts regularly updates a Watch List of 200+ exchanges, providing traders with verified, data-driven insights. We evaluate exchanges on security, reliability, commissions, and trading conditions, empowering users to make informed decisions. Before choosing a platform, we encourage users to verify its legitimacy through official licenses, review user feedback, and ensure robust security features (e.g., HTTPS, 2FA). Always perform independent research and consult official regulatory sources before making any financial decisions.

Learn more about our methodology and editorial policies.

Avoid futures and speculative instruments

When considering trading methods, avoid futures and speculative instruments altogether. Engage only in spot trading where immediate and transparent asset exchanges take place. Scholars agree that whether buying cryptocurrency is halal or haram in islam depends on the nature of the transaction, and spot trading is viewed as halal when it adheres to Shariah rules. Futures and derivatives, however, often resemble gambling and are generally considered haram.

Steer clear of staking

It is also important to stay away from staking models that pay interest on held assets. Instead, select methods that do not promise fixed or percentage-based returns, keeping in line with Islamic ethical standards in crypto.

Consult with knowledgeable scholars

Seek advice from scholars experienced in Islamic finance to help make compliant decisions about crypto investments.

What islamic authorities say about cryptocurrency

Islamic authorities around the world have issued various rulings (fatwas) on cryptocurrency, reflecting a range of opinions:

Supportive scholars. Some authorities, including Mufti Faraz Adam, maintain that cryptocurrency can be considered a valuable digital asset with inherent worth, making it permissible. His perspective, much like ongoing discussions on whether cryptocurrency is considered halal by scholars such as Zakir Naik, emphasizes that established cryptocurrencies can support halal transactions when used responsibly. Dr. Zakir Naik has expressed that cryptocurrency may be halal if it strictly follows Shariah principles, though he cautions against the high levels of speculation seen in many digital assets today.
Skeptical authorities. In Egypt, Sheikh Shawki Allam, the Grand Mufti, issued a fatwa against cryptocurrencies, arguing they lack control and can harm the financial well-being of individuals and communities.
Open to potential. Scholars such as Mufti Abdul Qadir Barakatullah believe that cryptocurrency offers promise for advancing Islamic finance. He holds that digital assets can serve beneficial purposes if managed transparently and if their use aligns closely with ethical and Shariah principles. Discussions on whether Bitcoin is viewed as halal according to Mufti Menk also highlight that the permissibility of cryptocurrencies often depends more on how they are used rather than the technology itself.

Crypto staking: halal or haram?

Crypto staking involves holding cryptocurrency in a wallet to support network operations and earn rewards. While some scholars argue staking is permissible because it supports network security, others believe it is too similar to earning interest, thereby making it haram. Here are some perspectives and our detailed overview:

Permissible perspective. Scholars who support staking argue that it functions similarly to asset ownership, where users contribute to network security and receive rewards in return. They often compare staking to crypto mining, where participants are rewarded for providing resources to maintain blockchain integrity, viewing both as active, value-creating processes.
Prohibited perspective. Critics contend that staking yields interest-like returns, violating the prohibition on riba. They emphasize that such rewards are speculative and lack real asset backing, making staking impermissible from a Shariah standpoint.

Exploring Related Islamic Crypto Topics

If you are deepening your understanding of whether cryptocurrency is halal or haram, it is also important to explore related areas. Knowing how zakat on crypto is calculated ensures you remain spiritually accountable. Many investors also ask whether buying meme coins fits Islamic guidelines, given their speculative nature. Engaging in crypto leverage trading raises serious concerns about riba and risk, while liquidity mining also needs careful review for Shariah compliance. Each of these areas impacts your overall halal crypto journey, so learn well through the articles marked on the above topics.

Crypto in Muslim countries: legal or restricted?

Muslim traders should approach staking cautiously, consulting reliable scholars and Islamic boards to determine if specific platforms meet halal crypto criteria. Here are a few examples:

Permissive countries. Some scholars argue that staking is halal when it supports blockchain security without guaranteeing fixed profits. They liken it to asset ownership, where contributions to system integrity are rewarded. This view reflects evolving Sharia-compliant crypto guidance promoting responsible technological engagement. In the UAE, the government has allowed cryptocurrency trading in Dubai’s free zone, and Bahrain issued crypto regulations in 2019. Both countries have shown progressive stances on digital assets.
Restrictive countries. Countries like Egypt, Indonesia, and Bangladesh prohibit or heavily restrict cryptocurrency use due to concerns about risk and religious compliance.

Holy scriptures: Quran and Hadith perspectives

Islamic financial principles are rooted directly in the Quran and Hadith, emphasizing the prohibition of riba (interest), gharar (excessive uncertainty), and maisir (gambling).

Cryptocurrency’s permissibility hinges on whether it aligns with these divine principles.

The Quran prohibits riba explicitly in Surah Al-Baqarah (2:275): "Those who devour usury will not stand except as stands one whom the Devil has driven to madness by (his) touch."
Hadiths emphasize fairness, real asset ownership, and avoiding speculative practices.

When evaluating if cryptocurrency is halal in Islam, scholars primarily check whether crypto transactions breach any of these sacred injunctions. Similar principles are applied when assessing the permissibility of other financial instruments, such as Forex trading or stock market investing, where issues like riba, gharar, and asset backing are also closely examined.

Pros and cons of cryptocurrencies

Decentralized ownership empowers ethical investing. In theory, decentralized platforms let Muslims bypass interest-based financial systems and take direct ownership without needing middlemen.
Smart contracts can enable transparent transactions. Blockchains that use smart contracts offer visibility into transactions, which can reduce ambiguity (gharar), a major Islamic finance concern.
Access to global halal projects. Crypto gives Muslims the opportunity to invest in tokenized projects that are built around halal principles, something traditional markets rarely offer.
Alternative wealth preservation. In regions suffering from inflation or unstable fiat currencies, crypto can act as a halal-preserving asset when approached carefully.

Speculative trading resembles gambling. Day trading and high-frequency speculation often look a lot like maysir (gambling), which is strictly forbidden in Islam.
Ambiguous token utility creates risk. Many tokens are launched without clear business models or usage, leading to a type of uncertainty that Islamic finance aims to avoid.
Staking and yield farming may involve riba. Platforms offering guaranteed returns through staking or yield farming can create structures that are suspiciously similar to interest-bearing accounts.
Lack of standardized Shariah screening. Unlike stocks, there’s no unified screening framework yet for halal crypto, which leaves individual investors to make risky calls on compliance.

Market regulators and institutional opinions

Several Islamic financial institutions and national fatwa councils have issued rulings on the matter. A prominent example is the Fatwa of MUI on crypto declaration.

Fatwa of MUI on crypto. Indonesia’s Ulema Council (MUI) ruled in 2021 that cryptocurrencies are haram for trading because they contain gharar and can be highly speculative. However, they allowed crypto as a digital asset for investment purposes under strict conditions.
Fatwa on cryptocurrency from various councils such as in Egypt and Malaysia shows a split approach: outright prohibition in some cases and cautious acceptance when transparency, ownership, and ethical use are guaranteed.

Islamic finance boards such as AAOIFI (Accounting and Auditing Organization for Islamic Financial Institutions) have also urged further research to establish global guidelines. Additionally, scholars often refer to the Mufti Taqi Usmani’s fatwa on bitcoin, where he emphasized caution due to Bitcoin’s volatility and speculative nature.

Trading cryptocurrency in a halal way while avoiding haram practices

When you’re just starting with crypto, many think staying away from interest-bearing platforms is enough. But the bigger question is what the coins actually represent. For example, Bitcoin doesn’t have anything behind it except the belief in its value, it’s purely digital and speculative. This makes it tricky, as you’re investing in something that doesn’t have real-world backing.

If you want to stay halal, stick with coins that have tangible, real-world uses, whether it’s for tech, finance, or other industries. Researching the team, mission, and goals of the project is key to understanding its true value.

Something most people miss is where the money is coming from. Even if you trade ethically, using funds from questionable sources, whether it's gambling winnings or earnings from other unethical activities, can turn your crypto profits into something haram. Make sure you’re only investing money that’s earned in a halal way. If you’re ever uncertain about a coin’s Islamic alignment, don’t hesitate to ask for advice from scholars or use platforms that emphasize transparency about their compliance with Islamic guidelines. Creating an ethical approach to your crypto trading can help you stay on the right path.

Conclusion

The debate over cryptocurrency's halal status involves deep reflection across religious texts, fatwas, and practical finance standards. Muslim investors should study sacred teachings, listen to credible scholars like Mufti Taqi Usmani and Mufti Menk, review rulings like the Fatwa of MUI on crypto, and observe the best practices advocated by seasoned halal traders. Following Islamic financial guidelines for crypto is essential for ethical and faithful investing.

FAQs

Are crypto derivatives like futures halal?

Generally, no, as they involve speculation and uncertainty.

Is mining cryptocurrency halal?

Yes, as long as it doesn’t involve interest or unethical practices.

Can Muslims work for cryptocurrency companies?

Yes, if the company’s activities align with Islamic principles.

Why is cryptocurrency considered halal in some Islamic countries but haram in others?

Regulatory interpretations vary. Countries like the UAE emphasize compliance with Islamic financial guidelines for crypto, allowing trading under transparent conditions. Others, like Egypt, focus on avoiding gharar and speculative risks, thus restricting crypto.

Team that worked on the article

Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses that want to improve their Google search rankings to compete with their competition. With expertise in search engine optimization (SEO) and content marketing, he ensures his work is both informative and impactful.

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Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.

As an author for Traders Union, he contributes his deep analytical insights on various topics, taking into account various aspects.

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).

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Forex leverage is a tool enabling traders to control larger positions with a relatively small amount of capital, amplifying potential profits and losses based on the chosen leverage ratio.

Crypto trading

Crypto trading involves the buying and selling of cryptocurrencies, such as Bitcoin, Ethereum, or other digital assets, with the aim of making a profit from price fluctuations.

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