Lecture on the permissibility of trading in digital currency futures contracts
In the name of God, the most gracious, the most merciful
the introduction:
Praise be to God, Lord of the Worlds, and prayers and peace be upon the most honorable of prophets and messengers, our master Muhammad, and upon all his family and companions.
My dear brothers and sisters, may the peace, mercy, and blessings of God be upon you.
I am pleased to meet you today to talk about a thorny and interesting topic, which is “the permissibility of trading in cryptocurrency futures contracts.”
1. Definition of cryptocurrency futures contracts:
Futures contracts are an agreement between two parties to buy or sell a specific asset at a specific price at a specific time in the future. In the context of cryptocurrencies, this asset includes currencies such as Bitcoin or Ethereum, and the transactions take place on reliable trading platforms.
2. The general legal rule in financial transactions:
In Islam, the basic principle of financial transactions is permissibility, unless there is conclusive evidence that there is a legal prohibition. God Almighty said:
“And God has permitted trade and forbidden usury” [Al-Baqarah: 275].
Therefore, any financial transaction, including futures trading, needs to be studied in accordance with Sharia conditions.
3. Legal conditions for the permissibility of trading:
To prove that trading in futures contracts is permissible, we must ensure that it is free from the following Sharia prohibitions:
- Usury: Usury is forbidden in Islam. If the futures contracts do not include interest, they are permissible. It must be ensured that the transaction is based on buying and selling without interest.
- Uncertainty and Uncalculated Risk: Islam forbids uncertainty, which is excessive ignorance in transactions. Trading in futures contracts if it is done according to clear terms, without deception or ambiguity, then it is permissible.
- Not trading in what is forbidden by Sharia: The traded asset (such as digital currencies) must be legitimate in itself. Digital currencies are not forbidden if they are not used in forbidden activities.
4. Contemporary legal efforts:
Many scholars have approved the permissibility of trading in digital currencies if the following is achieved:
- The platform is transparent and subject to oversight.
- Trading does not involve any usurious interest.
The purpose of trading is legitimate investment, not gambling.
Sheikh Dr. Yusuf Al-Qaradawi said:
Digital money is a type of modern asset, and it is permissible to deal with it as long as it achieves justice and is free from usury and uncertainty.
5. Responding to doubts:
- Gambling suspicion: Some people think that trading in futures contracts is gambling, but the truth is that trading depends on analysis and study, not luck. Therefore, it is not gambling if done with proper financial management.
- The suspicion of uncertainty: uncertainty only exists if the terms are unclear or there is excessive ignorance, and this can be avoided by using reliable platforms and reading the terms of the contracts carefully.
Conclusion:
My brothers and sisters, trading in digital currency futures contracts can be permissible if it adheres to the conditions of Islamic law and avoids forbidden things.
We invite you to research and consult before starting any financial activity to ensure that it is Sharia-compliant.
I ask God to provide us and you with lawful and good sustenance, and to grant us success in our work, for He is the Guardian of that and is able to do it.
Lecturer:
Yemeni Trader - Fayez Al-Rabadi