A top Egyptian cleric has warned Muslims that cryptocurrencies such as Bitcoin are forbidden under Islamic law, although he appears more concerned with protecting the power of the government rather than the souls of the pious.
This week, Egypt’s Grand Mufti Shawki Allam (pictured) issued an official fatwa in which he declared that “virtual currency” was an unacceptable “interface of exchange.” Allam likened cryptocurrency trading to gambling and thus is similarly forbidden under Sharia law “due to its direct responsibility in financial ruin for individuals.”
This is the third anti-crypto fatwa issued in recent months. In December, Turkey’s Directorate of Religious Affairs slammed both gambling and crypto, calling the latter a potential “means of deception” that could be used to obtain “unjustifiable and unjust enrichment.” A Saudi minister has similarly declared Bitcoin haram (forbidden) for giving “namelessness to crooks.”
These three countries share not only the Islamic faith but also intolerant authoritarian governments. While Egypt has yet to officially ban crypto usage, the Egyptian Financial Supervisory Authority warned the public in December that it considered dabbling in cryptocurrency trading to be a “form of deception that falls under legal liability.”
As reported by local media outlet Ahram, Egypt’s Allam claimed to have arrived at his crypto conclusions following discussions with economic experts. But, while ostensibly based on religious grounds, the fatwa’s primary anti-crypto rationale appears more interested in preserving the regime’s authority over financial matters.
Allam claimed that crypto usage “undermines Egypt’s ability to maintain and stabilize its own currency,” and interferes with the regime’s “necessary supervising measures on domestic and foreign financial activities.”
Allam’s counsellor Magdy Ashour went one better, trotting out the canard that Bitcoin “is used directly to fund terrorists,” something to which the official Egyptian pound is apparently immune. Ashour also declared that Bitcoin “has no set rules, which is considered as a contract annulment in Islam.”
What Ashour fails to understand is that, under his own reasoning, Egypt’s fiat currency is equally rule-free. In 2016, the government devalued the Egyptian pound at the urging of the International Monetary Fund in order to secure a $12b IMF bailout. The result was massive inflation and cripplingly high interest rates, which many businesses and consumers might consider a ‘contract annulment’ imposed by the state without their consultation or approval.