Explore whether crypto staking aligns with Islamic law in our comprehensive guide. Learn the key considerations for compliance. Read more to find out!

Many blockchain networks' well-regarded decentralization and security benefits are highly dependent on one specific activity — 

. Staking involves contributing crypto funds to 

 (PoS) blockchains to power the transaction validation activity on them. Stakers — which can be institutional entities or individuals — lock their cryptocurrency funds on these blockchains to receive the chance to validate blocks of transactions. In return, they receive cryptocurrency rewards for their work, making crypto staking a potentially viable income source. 

Many individuals and smaller business entities who lack the technical capacity or financial reserves to act as blockchain validators can still earn staking rewards by delegating their funds to their preferred validator on a PoS blockchain.

Along with liquidity mining, yield farming and crypto coin trading, crypto staking is one of the critical ways to earn income within the blockchain industry. Many Muslim investors may wonder if crypto staking is a halal activity. In this article, we cover all the key details related to crypto staking and its status from an Islamic law perspective, in order to help Muslim investors decide whether staking cryptocurrencies is halal or haram.

In order to maintain their operations and process transaction blocks, certain blockchain platforms (those based on a PoS block validation model) require the availability of crypto funds contributed to the network. This is because these blockchains award the right to validate transaction blocks to 

 that have staked/contributed a certain amount in the network's native cryptocurrency. In the most standard implementation of PoS, the more funds a node has staked on a platform, the higher their chance of being selected as the validator of the next block. This system is used to encourage participation from validators who have 

 — that is, those genuinely interested in supporting the network and ready to contribute funds for this purpose.

Staked funds aren't given away or "donated" by validators — they remain the property of the validator, and can be reclaimed/unstaked if and when the network participant who has provided them decides to stop their block processing activities. To encourage users' participation in the block validation process, validator nodes earn staking rewards for each block they help process.

Most crypto users don't act as full validator nodes on PoS networks, as this often requires substantial minimum staking amounts and technically intricate processes to set up and run a node. However, these users can also earn income from staking crypto in various more affordable and user-friendly ways. Examples include delegating their funds to their preferred validator on blockchains supporting such delegation, or participating in a staking pool (more on that below). Via these options, users can earn a share of the total staking rewards awarded to full validator nodes.

Additionally, crypto users can earn staking rewards using specialized products on crypto trading platforms and crypto exchanges. One such product is 

, previously known as Bybit Staking, which allows you to earn staking rewards without the complexities of staking in blockchain environments. Staking products on exchanges often provides a wider choice of crypto tokens and coins than direct blockchain-based staking. This is because blockchain-based staking options are limited to native coins of PoS networks, whereas exchanges frequently offer additional assets, such as popular 

Independent staking involves setting up and running your own full validator node on a PoS blockchain network. You are responsible for technical setup procedures and are typically required to keep your node online and ready to process blocks without significant downtime.

Minimum staking requirements for independent staking are often substantial. For instance, the 

 (ETH) blockchain requires validator nodes to stake at least 32 ETH (around $80,000 as of Nov 1, 2024), while becoming a 

 (BNB) validator requires an investment of 10,000 BNB (currently around $5.7 million). Technical uptime requirements aren't child’s play, either, as validator nodes are encouraged to be online at all times, and frequent downtimes may lead to penalties in the form of slashing, whereby you lose some portion of your staked funds.

The advantage of independent staking is that you can earn substantial amounts by receiving full staking rewards from the blockchain. On PoS platforms such as Ethereum, full validators don't need to pay anyone commission fees or other charges, nor do they have to share their rewards with others. In comparison, on 

 (DPoS) blockchains, independent validators share the rewards with those who have delegated their funds to them, but typically still earn a more significant cut than each individual delegator.

For most crypto users, the technical and financial requirements of independent staking are too high. As an alternative, these users can join a staking pool to earn crypto rewards. Staking pools are platforms that facilitate the pooling of crypto funds from many users. These funds are then used to manage the actual direct staking, for instance by running validator nodes or delegating the funds to blockchain validators. By joining a staking pool, you can earn a share of staking rewards commensurate to the share of funds you’ve provided. With PoS staking pools, you only need to contribute crypto, and don't have to worry about providing computing capacity.

Understanding Islamic Finance and Crypto Staking

For many Muslim investors, adhering to the principles of Islamic finance and Shariah law is important when choosing an investment product. Islamic finance principles state that any investment should avoid interest (riba), speculation/gambling (maysir) and excessive uncertainty (gharar). It also shouldn’t involve trading assets that you don't actually own, or be related to haram activities or products, such as drugs, alcohol, pork, gambling, betting or pornography.

When evaluating whether crypto staking is a halal activity, it's important for investors to differentiate it from other popular forms of earning crypto income: liquidity mining and yield farming. 

 involves providing crypto funds to coin swap pools on 

 (DEXs). These funds are required by some DEXs — those based on the 

 (AMM) model — to have enough liquidity for swap operations. Liquidity providers earn a share of transaction fees from swaps involving the assets in the pool. In turn, 

 refers to the strategic allocation of crypto funds across various 

 (DeFi) protocols to maximize yields earned. Yield farming allocations can often involve borrowing and lending activities, often with the involvement of interest (riba).

Learn all about Bybit Islamic Account and

Unlike many yield farming activities, crypto staking doesn't usually involve riba. There is no lending or borrowing of funds with interest in crypto staking. Stakers invest their funds to support the operations and security of blockchain networks, and earn staking rewards based on the amounts they’ve contributed. These reward payouts aren't based on money that has been lent to someone with interest.

As noted above, crypto staking isn't an interest/riba–based activity. Additionally, there's no maysir, or gambling/speculation, in crypto staking: stakers earn a certain amount of relatively stable income that has little to do with speculative trading activities. The fixed and stable nature of crypto staking rewards also indicates no gharar, or excessive uncertainty. In fact, crypto staking is considered among the least 

 or speculative forms of earning income in the blockchain industry.

As such, crypto staking lacks the characteristics of the three fundamental prohibitions in Islamic finance — riba, maysir and gharar. This indicates that staking cryptocurrencies on blockchain platforms may qualify as a halal activity.

Additionally, Muslim investors need to ensure that the blockchain platform they support with staking isn't involved in haram activities, such as those related to alcohol, pork or other products forbidden in Islam.

With crypto staking being a halal activity in most cases, investors might be wondering which staking platforms and coins are the most suitable from the Islamic finance perspective. Below, we list five cryptocurrencies and their associated blockchains that are likely the optimal choices for a Muslim investor looking for staking opportunities. These five options are among the largest PoS networks in the industry. This ensures that their staking processes are among the most stable and predictable in the cryptosphere, which helps minimize the probability of gharar. 

As the largest players in the industry, these chains' native cryptocurrencies also feature some of the highest current trading volumes, which ensures a higher degree of price stability and a lower likelihood of speculation/maysir for these coins. This is also a key factor from an Islamic finance perspective, as you’ll stake and earn rewards in these platforms' respective crypto assets.

Ethereum (ETH) — specifically, its current PoS version, 

 — is the world's largest blockchain currently utilizing staking for block validation. It’s known to provide stable and highly sought-after staking rewards in its native cryptocurrency, ETH. While independent staking on the network, which requires 32 ETH collateral, is financially not viable for many crypto users, you can still join a staking pool to earn rewards.

 (SOL) is another top PoS blockchain. It typically features faster processing times and lower fees for crypto transactions than Ethereum. Unlike Ethereum, Solana doesn't impose a minimum amount to run a full validator node. In theory, that means anyone could run an independent staking operation on the blockchain. However, in practice, the competition among Solana validators for the chance to validate blocks is intense, and those with modest amounts staked in them are unlikely to win the race. The good news is that Solana, unlike Ethereum, supports stake delegation. This gives you two practical options to earn staking rewards as an ordinary user: delegate your stake to a preferred validator, or join a staking pool.

 (ADA) is a leading PoS blockchain network that exclusively uses staking pools for its block validation. This means there's no individual staking on Cardano. To participate in staking on this blockchain, you have two options: run your own pool, or, as a more practical choice for most users, join an existing one.

 scalability solutions for Ethereum. At the heart of its ecosystem is the Polygon PoS blockchain, which supports independent staking via running a validator node, as well as stake delegation. 

Currently, Polygon validators are required to stake their POL on Ethereum’s network, although the platform plans to enable full direct staking via its own chain in the near future. For most users, however, stake delegation is the best option: in this mode, you don't need to worry about technical intricacies, such as which actual network — Polygon or Ethereum — is handling your stake. Besides the stake delegation option, you can also choose an external staking pool provider for the platform's native token (POL).

 (AVAX) is another popular and well-regarded blockchain that offers staking. Somewhat smaller than most of the chains described above, Avalanche is still among the heavyweights of the blockchain industry: its native coin, AVAX, has amassed a 

 of over $10 billion (as of Nov 1, 2024). 

Avalanche offers direct independent staking: you can run your own validator node, or delegate your stake. The independent validator staking option requires collateral of 2,000 AVAX ($49,880 as of Oct 31, 2024), while the minimum requirement for stake delegation is a relatively modest 25 AVAX ($623.50). As is the case with other major PoS chains, you can also find a variety of external staking pool providers for AVAX.

The crypto market features a variety of passive income opportunities, but identifying which ones are halal isn't always straightforward. In its typical format, crypto staking can be considered a halal activity, as it doesn't involve lending or borrowing funds with interest (riba), speculative trading akin to gambling (maysir) or excessive uncertainty (gharar) often associated with some other crypto activities. As such, Muslim investors can use cryptocurrency staking, although it's always important to carefully scrutinize the actual activities of the crypto project offering staking. If these activities aren't linked to haram industries or products, staking may be one of the safest options for a crypto-minded Muslim investor. 

Disclaimer: Due to varying opinions on Shariah compliance of crypto trading, we recommend you to conduct your own further research. Please note that the posts on Bybit Learn should not be considered as fatwa. Our aim is to present information on different topics to empower readers to make informed decisions.

Intermediate

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Is Crypto Staking Halal? All You Need to Know

Discover how to trade USDC perpetual futures on Bybit. Learn about margin types, collateral options, order types and risk management tools.

Perpetual futures at Bybit enable traders to speculate on cryptocurrency prices without expiration dates, providing flexibility for a wide range of strategies. With the added stability of USDC, one of the leading USD-pegged stablecoins, alongside customizable leverage and robust risk management tools, USDC perpetual futures are an ideal choice for both novice and seasoned traders.

What Are USDC Perpetual Futures Contracts?

USDC perpetual futures contracts are a type of crypto derivative that lets traders speculate on asset prices without needing to worry about contract expiration dates. This allows traders to hold positions as long as they meet margin requirements.

 (USDC) is a stablecoin pegged to the U.S. dollar (USD), designed to maintain a 1:1 value with it. It’s widely used as collateral in crypto trading for its stability and reliability.

Top Bybit USDC Perpetual Futures by Trading Volume 

Bybit offers several popular USDC perpetual futures contracts, with the highest trading volumes often seen in BTC-PERP, ETH-PERP and SOL-PERP. 

These contracts allow traders to speculate on the price movements of major assets while using USDC as margin, providing stability and flexibility in volatile markets.

How Do USDC Perpetual Futures Contracts Work?

 on Bybit allow traders to use USDC as collateral to speculate on price changes of major crypto assets. A key feature of perpetual futures trading is the 

, a periodic payment exchanged between long and short traders to keep contract prices close to the asset's spot price.

How to Trade USDC Perpetual Futures on Bybit

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Bybit offers leverage of up to 125x, allowing you to amplify gains or losses. Adjust leverage according to your 

Margin Requirements for USDC Perpetual Positions

How to Calculate Position Sizing for Perpetual Positions 

Position sizing is essential in perpetual futures trading, because it determines the capital at risk and supports effective risk management.

 to estimate appropriate sizing based on risk tolerance and account balance.

, in the example shown above, a trader opens a 

 of 180 USDC, the trade yields a profit of 500 USDC, resulting in a return on investment (ROI) of 277.77%. Bybit’s 

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Other Advanced Tools for USDC Perpetual Trading

Conclusion: Getting Started With USDC Perpetuals Futures

Trading USDC perpetual futures on Bybit offers unique advantages, such as using USDC, one of the leading stablecoins, as collateral. This makes USDC perpetuals a reliable choice for those who are wary of market volatility. Bybit’s platform provides additional features, such as flexible leverage, advanced trading tools and access to in-depth market data, which together enhance trading precision and control.

However, it’s essential to grasp the risks involved. Leveraged positions amplify both gains and losses, so understanding risk management tools — such as setting stop-loss orders — is crucial for preserving capital. New traders can explore 

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 and explore our flexible perpetual futures contracts.

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The Global Dollar Network, launched by leaders in fintech and digital assets including Anchorage Digital, Bullish, Kraken, Nuvei, Paxos, and Robinhood, aims to accelerate global stablecoin adoption. 

Daily Top Performer — Mask Network (MASK)

The S&P 500 fell 0.28% as investors anticipated the U.S. election and a likely 25-basis-point Fed rate cut, with major tech stocks like Tesla and Amazon leading the decline. Coindesk Indices, an index measuring broader cryptocurrency market performance was down by 1.94%, with Bitcoin and Ether dropping by 2.39% and 3.87%, respectively in the past 24 hours.

Today’s top performer is MASK, which surged 8.0% following Mask Network’s unveiling of a revamped website with enhanced features and tutorials.

Mask Network, founded in 2017, is a protocol that bridges Web 2.0 and web3, enabling users on platforms like Twitter and Facebook to access web3 features, including crypto and NFTs. It supports multiple blockchain networks, such as Ethereum, BNB Chain, Polygon, and Solana, making it chain-agnostic. Mask Network 

 an update to its website, featuring a new layout that highlights product features and a revamped tutorial page.

Check Out the Latest Prices, Charts, and Data of 

, launched by leaders in fintech and digital assets including Anchorage Digital, Bullish, Kraken, Nuvei, Paxos, and Robinhood, aims to accelerate global stablecoin adoption. The network introduces USDG, a new stablecoin issued by Paxos, compliant with Singapore’s Monetary Authority framework. It seeks to address shortcomings in current stablecoins by providing trusted, low-cost options for enterprises while rewarding network participants. The initiative encourages collaboration among custodians, exchanges, and financial institutions to innovate in global money movement. USDG is now available through various partners, with DBS Bank managing its reserves.

Yesterday, Bitcoin spot ETF flows totaled -$579.5 million, with the Grayscale Bitcoin Trust (GBTC) accounting for -$63.7 million and non-GBTC products comprising -$515.8 million.

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Global Dollar Network Launched to Boost Stablecoin Adoption with New USDG Stablecoin

Web3 gaming is a multibillion dollar industry with millions of players worldwide. Its games come in a variety of styles. Learn more here.

 has transformed its role from that of a cutting-edge financial investment to become a part of everyday life. While 

 concepts are used for a multitude of practical services, they're also a fantastic source of entertainment. Gaming is currently one of the biggest applications of web3 design. By adding blockchain features to gaming experiences, developers have been able to make games even more exciting and meaningful. Explore this guide to see why web3 gaming is so popular. 

Web3 gaming is a multibillion dollar industry with millions of players across the globe. Its games come in a variety of styles, ranging from first-person shooters to puzzle games. The main commonality among all of these games is the use of blockchain technology, such as in-game cryptos and 

“Web3 gaming” might sound pretty high-tech, but it's actually surprisingly simple. Web3 games are just standard games that incorporate blockchain technology into their designs. 

The majority of web3 games rely on two basic structures: half of each game is a standard video design that uses coding, software and hardware to create a system in which users input instructions and receive a gaming experience. The component that differentiates web3 gaming from other gaming is that of its blockchain technology. While designing their games, web3 developers also connect their systems to a blockchain, setting up multiple 

 that trigger when certain in-game actions occur. This design allows web3 games to include all sorts of blockchain mechanics. The following are a few examples:

Web3 gaming is an incredibly broad industry. Some web3 games are simple mobile apps where you tap a single button, while others are complex worlds that require hours of practice to understand. To get a good understanding of the web3 gaming landscape, it's useful to take a look at some of the most common types of games.

 gaming or DeFi gaming, investment gaming emerged as the first generation of web3 games, essentially a gamified version of standard crypto investment, with features such as 

 focus primarily on making money, but they use a game-based interface to make the process more entertaining.

 or P2E games) gamify standard behaviors. Users might tap a button or take a walk in real life, and then their action mines cryptocurrency that’s directly deposited in the player's wallet. Ever since the earliest 

, this has been one of the most popular forms of web3 gaming.

The modern generation of web3 game development is moving away from repetitive, crypto-focused designs and instead attempting to copy strategies from the traditional gaming industry. Competition-based games involve players battling each other. Though players can earn digital assets, the main goal is simply to compete with each other. Game options like 

 mimic first-person shooter competitions, while styles such as 

 gaming. This style of gaming prioritizes socializing with other gamers and building a community. Options like 

 create complex worlds in which players can create a character to role-play and interact with other characters.

The unique technology behind web3 gaming allows this industry to offer players key features they can't find anywhere else. Depending upon the game you choose, you may be able to enjoy many different fantastic game components.

For many players, the big appeal of web3 gaming is that digital assets have actual value. Using blockchain technology for in-game currency and items allows players to trade their assets both within and outside of the game. This allows the market to assign their assets a value, and players can choose to convert their items into other types of currency if they wish to.

Multiple games in the web3 space operate under the principle of decentralization. Instead of having one company run the entire system, the game is run as a collective of players and developers. Blockchain technology allows players to vote on various decisions, such as what mechanics to add to the game or what the price of an object should be. 

The majority of web3 games emphasize player ownership of in-game items. Users have direct control over the things they earn and create within the game. Not only can players buy and sell their possessions as they wish, but they can choose how to use or upgrade their digital assets.

Virtual Reality and Artificial Intelligence

Web 2.0 gaming is at the forefront of gaming design. Though virtual reality, augmented reality and artificial intelligence technology aren’t a requirement for web3 gaming, they’re far more common within the gaming sector. Many games hope to use these technologies to offer the most immersive and detailed experiences possible.

All the unique features of web3 gaming make it a particularly useful type of gaming universe. Compared to traditional games, web3 games have many special advantages.

Blockchain technology is a highly useful tool for game developers. For example, it makes it a lot simpler to manage things like player rewards and land generation, giving developers more options when designing their games. Web3 gaming systems also have the ability to run online, seamlessly interacting with a variety of 

 products and blockchain tools. Ultimately, this means that the web3 gaming community has some truly unique games that couldn't flourish with standard technology. 

Web3 ecosystems streamline the process of making a profit from games. Since it's so easy to transfer and trade assets, players can more easily convert their gaming skills into cash. Not every player may make millions, but web3 games come with many opportunities to earn money.

Since web3 games often run on principles of decentralization and transparency, they're often an ideal way to safeguard players' rights. Players usually retain control of their own data and don't have to worry about their hard-earned assets being taken away from them. Furthermore, web3 games typically value and respect the input of their communities. Blockchain technology makes it easy to ensure that community members are involved in every step of game production.

Web3 games are known for their capability to offer an immersive and seamless gaming experience. In-game transactions and crafting are directly linked to real blockchain assets, so gamers can feel particularly connected to their games. Instead of having all gaming experiences take place within a specific program, gaming experiences have real-world ramifications that can be explored through multiple blockchains and online communities. 

Though web3 gaming has many benefits, it's not always a perfect ecosystem. Here are some of the issues that web3 gamers may encounter. 

Web3 games operate with some nontraditional technology, so they can be quite confusing. Instead of simply downloading an app or launching a website, users might need to do things like 

. This adds an extra layer of complexity that may make it hard for web3 games to onboard new users.

While web3 games have the potential to offer an immersive experience, it's not a requirement. The focus on investing and profitability has led to some criticism from the gaming community. There are quite a few projects designed simply to make money, and these often struggle to engage players. Many gamers complain about web3 games with overly repetitive mechanics, cheap artwork or bland storylines. It can take some time for gamers to sort through the vast amount of web3 projects and find games that are fun to play for hours at a time. 

Both web3 gaming and traditional gaming hope to appeal to the same user base. Both styles of gaming endeavor to entertain people by appealing to their competitive and creative instincts. There’s quite a bit of overlap in the styles of games being released, and the same developers and gaming studios are working in both traditional and DeFi spaces.

However, unlike traditional games, web3 games can take advantage of newer technology. This style of gaming offers many unique aspects not found in traditional games:

Web3 gaming is still a fairly new industry, with many changes ahead. Currently, the big trend in web3 gaming is 

 models. However, online discussions suggest that users may be shifting away from simpler games. There's been a growing demand for more complex games that mimic the depth and creativity of AAA games. 

 with endless possibilities for fighting, crafting, exploring and more. In the future, web3 games may begin to prioritize entertainment and engagement over investment opportunities. You can expect to see fewer games with DeFi tie-ins, and more games that try to mimic the appeal of games like 

Web3 gaming is poised to become one of the biggest blockchain industries. 

 by 2030. With so much potential profit, web3 gaming is certainly worth exploring. Both amateur traders and professionals have the chance to earn money through different games in web3 spaces.

However, keep in mind that the days of earning thousands of dollars just by tinkering around with a new GameFi product are most likely over. With so many products on the market now, it's much harder for players to earn money by tapping a few buttons. Instead, the big investment opportunities are more likely to come from supporting the products themselves. While you might be able to make a little money by playing a game, purchasing a new game's crypto and watching it grow is likely to be a more efficient and profitable use of your time.

Web3 gaming's capacity to combine entertaining game mechanics with profitable blockchain technology has helped this industry soar. Not only are blockchain games currently worth billions of dollars, but they're also poised to capture more players than traditional online games. Investors who want to be on the cutting edge of web3 trends would certainly do well to pay close attention to web3 gaming.

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Web3 Gaming: Elevating Play to Next-Level Realities

Bybit Learn

Crypto

Is Crypto Halal, or Haram? Learn the key factors Islamic scholars consider when determining whether cryptocurrencies like Bitcoin are permissible (halal) or forbidden (haram) for Muslim investors.

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Cryptocurrencies have emerged as a popular trading and value storage asset over the past decade, with interested investors across the globe, including in the Muslim world. Many predominantly Muslim countries, as well as those with significant Muslim minorities, now feature high rates of cryptocurrency ownership, with the United Arab Emirates (UAE) being the absolute 

 as of 2024. According to the same data, Turkey boasts the third-highest ownership rate, while Singapore, which has a sizable Muslim minority representing around 15% of its population, is in the second position. The UAE and Singapore have also emerged as leading cryptocurrency and 

Despite considerable interest in crypto in the Islamic world, there's still a large degree of uncertainty over its halal status, a key consideration for many Muslim investors. Some countries — for example, the UAE and Saudi Arabia — have issued warnings about the Shariah-compliant status of cryptocurrency and/or crypto trade. However, no country has banned crypto outright on these grounds. 

Adding to the confusion, many Islamic scholars have arrived at varying interpretations of the nature of cryptocurrency. Some scholars have opined that crypto is haram (not permissible for Muslims), while others have issued advisory notes broadly endorsing the majority of cryptocurrencies, including 

 (BTC). Due to this difference of opinions, and the absence of any single centralized ruling, many investors are uncertain whether crypto is halal — i.e., permissible for Muslims.

This article covers key points in the ongoing discussion to help you decide whether any cryptocurrencies can be considered halal assets.

 are digital assets issued and used on blockchains, decentralized networks on which the issuance, transfers and storage of these assets are protected through a cryptographic security mechanism. In a typical blockchain, many independent user nodes protect the operations and integrity of the network through a decentralized 

. This decentralized consensus, as well as independence from a central controlling entity, makes these networks and their cryptocurrencies a viable alternative to traditional banking systems.

The world's first (and still largest) cryptocurrency is Bitcoin, the native digital asset of the Bitcoin blockchain that was launched in 2009. A few years after its introduction, Bitcoin was being traded on platforms beyond its native network, such as 

 (DEXs) based on other blockchains. By now, thousands of cryptocurrencies are in existence, and these digital assets form an important asset class within the broader finance ecosystem.

On their native blockchain platforms, cryptocurrencies serve as assets for value transfer and storage, and also contribute to keeping their respective blockchains secure and functional so that these networks can operate in a decentralized way. All crypto operations on blockchains are publicly viewable, upholding the transparency ethos of blockchain technology. On CEXs and DEXs, cryptocurrencies can be used for value transfers and storage, as well as for trading to generate profit.

To define whether cryptocurrency is halal for Muslim investors, a firm understanding of Shariah and its specific subset, Islamic finance, are imperative. Shariah defines the overarching set of principles, regulations and laws that guide Muslims' personal, moral, ethical, legal and economic behavioral standards and obligations. Among the fundamental tenets of Shariah law are justice and fairness in all dealings, correct worship practices, good morals and behaviors that Muslims must follow, public and personal health and cleanliness standards, cooperation and solidarity among members of the society, and worship and societal transaction standards.

The last mentioned element of Shariah law — worship and transaction standards — includes a subset of rules and regulations dealing with financial transactions, practices and ethos. These laws and regulations form the body of the Islamic finance principles that Muslims must follow. Some of the fundamental principles of Islamic finance include the prohibition of interest (riba); excessive uncertainty (gharar); and gambling/speculation (maysir). In addition, there’s a proscription against activities that don't result in tangible value for the individual and society. Key principles also include transparency in dealings, and maintaining fairness and ethical standards in all transactions.

Many of the key characteristics of cryptocurrency align with the major principles of Islamic finance. This includes the absence of interest in crypto transactions, the use of cryptocurrency for secure value storage without speculation or excessive uncertainty, and the transparent nature of blockchain-based crypto operations.

Islamic Scholars’ Views on Cryptocurrency

Islamic scholars have not formed a unified view on whether cryptocurrency is either halal or haram. Some scholars or institutions consider it haram. For instance, Turkey's 

 that crypto is haram, due to its potential for speculative use (i.e., maysir). Another high-profile opinion on this matter came from the former Grand Mufti of Egypt, Dr. Shawki Allam, 

 crypto trading may be haram due to its unregulated nature and potential to be used for funding illicit activities.

However, many other Islamic scholars and institutions assessing the Shariah compliance of financial products take a more nuanced approach. For example, the Shariyah Review Bureau, a popular Shariah compliance consultancy that operates the 

 portal, assesses the halal status of each cryptocurrency individually based on its use cases and functions.

In general, the Bureau assigns the haram classification for lending and borrowing 

 (AXS) and meme coins with zero utility, such as Dogecoin (DOGE). For most other cryptocurrencies, including Bitcoin, it typically endorses the halal classification. The advantage of the Bureau's approach is in its detailed and selective nature of assessment. Instead of treating all crypto assets and platforms as one and the same, the Bureau examines the details of each asset.

Some scholars and institutions have largely endorsed crypto in general as halal. One of the U.K.'s leading Islamic law scholars, Mufti Abdul Qadir Barkatullah, has maintained that cryptocurrency is halal because it’s evolved into a widely accepted form of value exchange. This aligns with an earlier ruling specifying that if an asset has been widely accepted as a legitimate form of payment in society, it should be treated as halal.

Another leading Islamic scholar, Mufti Muhammad Abu Bakar, takes an in-depth look into cryptocurrency, Bitcoin and blockchain in general in his 

, concluding on the basis of his extensive review that cryptocurrency is halal.

So, Is Cryptocurrency Halal — or Haram?

How can Muslim investors make confident investment decisions concerning these digital assets in an environment of varying opinions on crypto's halal status? In general, it's recommended that prospective traders or investors take a selective approach and look at the features and functionality of each crypto asset and product they might consider. Cryptocurrencies and blockchains differ substantially in terms of their properties. Some, like the crypto tokens of DeFi platforms on which interest features prominently, aren't likely to be viewed as halal by anyone.

Many other crypto coins, however, aren't related to interest-generating solutions, and their transfers and storage involve no interest (riba), uncertainty (gharar) or speculation (maysir).

Some cryptocurrencies represent tokenized versions of 

 (RWAs). These are directly based on tangible assets that may exist beyond the crypto world, such as real estate, stocks and bonds. Depending upon their origin, these assets may align well with the principle of tangibility in Islamic finance, which stipulates that any economic activity should be based on real assets and the generation of real-world value.

When it comes to crypto trading — as opposed to the basic operations of transferring and storing funds — the halal status of cryptocurrencies might be less certain, depending upon the actual trading product used. The same asset (e.g., Bitcoin) might be used in crypto trading and investment products that involve no riba, and feature low probability of uncertainty or speculation. These products might qualify as halal. On the other hand, if the same crypto asset is used in an interest-bearing or highly volatile trading product, it's unlikely to be aligned with Islamic principles. As such, a decision often depends upon the precise product features, rather than the underlying cryptocurrency itself.

Bitcoin is by far the largest cryptocurrency by market capitalization, and typically features volatility levels that are significantly lower than those of most other crypto assets. Its high trading volumes and reputation as a secure value storage asset contribute to its lower volatility and, therefore, lower uncertainty than that of lower-cap cryptocurrencies.

Bitcoin also features the valuable utility of being used as a secure and private 

 (P2P) exchange asset. Moreover, Bitcoin is a 

 cryptocurrency, with a maximum supply limit of 21 million tokens. This characteristic is designed to avoid excessive supply inflation, and to reduce the likelihood of its devaluation. Such a deflationary feature arguably adds stability to Bitcoin, further enhancing its potential acceptance as a halal asset.

As a vehicle of value exchange and wealth storage with deflationary characteristics, Bitcoin itself — unless used in specific interest-bearing or highly volatile crypto products — might be deemed halal, a view that is shared by the assessment of the 

Other Notable Shariah-Compliant Cryptocurrencies

Ether (ETH) is the second-largest crypto by market cap behind Bitcoin. It's used to secure the operations of the 

 blockchain, and may be used for digital value transfers and storage, similar to the way the BTC coin is used on the Bitcoin blockchain. ETH provides tangible value as a secure wealth exchange and storage asset in a decentralized environment. As such, unless it's used in specific interest-bearing or highly volatile crypto trading products, ETH might qualify as a halal asset.

It should be noted that the Ethereum blockchain hosts a variety of 

 (DApps), many in the DeFi niche. Certain DeFi apps on Ethereum are actively involved in interest-bearing lending, borrowing and yield management operations. However, these DApps normally use their own crypto tokens — e.g., AAVE or COMP — for these operations, rather than the ETH token.

 cryptocurrency that maintains a tight peg to the U.S. dollar. While it ranks behind BTC and ETH, taking the third position in market cap rankings, USDT is the world's most traded crypto asset. Its stable peg to the greenback has largely been successfully maintained since Tether’s launch in 2014, which makes it a highly popular asset for crypto-to-fiat operations. The coin's near-perfect stability and backing by the world's most popular fiat asset makes it an RWA that is likely to be considered halal.

 blockchain, Ethereum's major competitor in the niche of DApp-capable blockchains. Solana aims to provide a platform for DApps that’s cheaper and faster than Ethereum. In general, SOL performs exactly the same functions on Solana as ETH does on Ethereum: digital value transfers, value storage and securing the network via its 

 (PoS) block validation mechanism. Similarly to BTC and ETH, SOL is likely to be considered a halal asset unless it’s used in specific interest-generating or highly speculative crypto products.

 is the native cryptocurrency of the decentralized public XRP Ledger. The token is used primarily to support B2B payments and settlements. As a cryptocurrency that enables efficient and secure digital currency payments in the business world, XRP provides real utility, arguably bolstering its viability as a halal asset.

 (POL) is an ecosystem of decentralized platforms and solutions that primarily provides cost-efficient and scalable ways to conduct crypto operations on the Ethereum blockchain. The ecosystem's native crypto asset, POL, is used to secure the functioning of these platforms through a decentralized consensus mechanism. It can also be used for secure digital asset transfers and storage. POL’s functions are largely similar to those of ETH and SOL within their respective environments, increasing the likelihood that POL is to be considered a halal asset.

The use of cryptocurrencies raises specific concerns from the perspective of Islamic finance. Many crypto trading activities involve excessive volatility, which may lead to uncertainty (gharar). There are also instances of crypto products supporting speculative activities that may qualify as being maysir.

Additionally, while most blockchains are publicly viewable (which contributes to better transparency), the actual identities of address holders remain anonymous. This might raise ethical concerns with regard to the legality and ethics of funds circulating on the blockchain. Some might also argue that the digital nature of cryptocurrencies could contradict the Islamic finance principle of all economic activity being based on tangible assets.

Despite these concerns, it's important to remember that cryptocurrency is designed simply for the secure storage and exchange of value while promoting the independence and decentralization of blockchain platforms. This in itself provides tangible value to the concept of cryptocurrency. Importantly, by default, crypto transactions involve no interest (riba), and they operate away from traditional banking systems in which riba is a heavily utilized mechanism.

As such, depending upon the actual trading or investment product involved, cryptocurrencies may selectively be considered to be assets aligned with core Islamic finance principles.

Since there's no central governing body that provides a definitive and all-inclusive fatwa (ruling) on cryptocurrencies' halal status, Muslim investors need to look into the specifics of each product and crypto asset they might consider. If the cryptocurrency or the product it's based on is free from riba, involves no excessive risk and isn't based on speculation, it might comply with Shariah principles. Additionally, Muslim investors might further consider specifically designed Shariah-compliant cryptocurrency products, such as 

, to ensure that they take advantage of crypto opportunities without violating the principles of Shariah.

Is Crypto Halal, or Haram? What Muslim Investors Need to Know

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