According to Egyptian media reports, Egyptian Grand Mufti Shawki Allam has issued an official fatwa that declares Bitcoin impermissible under Islamic Sharia law. The nation’s top imam reportedly released the fatwa on Monday, declaring that the “virtual currency” is forbidden since it has no backing from centralized authorities and carries with it a risk that traders could suffer financial ruin.
Allam suggested that he had been in consultation with economic experts prior to issuing the fatwa. Ahram Online reported that he cited several reasons for his conclusion, including his determination that digital currency trading is akin to gambling. Islamic law forbids gambling, because of the potential financial harm that it can bring to individual participants.
In addition to those concerns, the Grand Mufti cited many of the same concerns that the world’s governments have chosen to emphasize: potential money-laundering, illicit contraband transactions, and other criminal activities.
That fatwa comes on the heels of a similar ruling from Allam’s counsellor, Dr. Magdy Ashour, who recently told Egypt Today that Bitcoin “is used directly to fund terrorists. It has no set rules, which is considered as a contract annulment in Islam. That is why it is forbidden.”
Meanwhile, Egypt remains a country where millions of citizens lack access to even the most basic financial services. As Egypt Today notes, “most of Egypt’s 93 million people have no bank accounts.” And since the country has no regulations governing digital currencies, retailers are unable to accept Bitcoin and other cryptocurrencies in exchange for goods and services.