Is zakat obligatory on her?
With the spread of digital currencies such as Bitcoin and Ethereum, many Muslims have begun to wonder about the ruling on zakat on these currencies in light of the unique nature of these currencies. To answer this question, it is important to present the legal evidence from the Holy Quran and the Sunnah of the Prophet, as well as the opinions of contemporary scholars who have compared these currencies to traditional money.
What is Zakat?
Zakat is one of the five pillars of Islam and is obligatory for every financially capable Muslim. The money to be paid zakat must be owned outright, reach the nisab (the minimum amount on which zakat is due), and a full lunar year must have passed. If these conditions are met, zakat is given at a rate of 2.5% of the value.
Is zakat obligatory on digital currencies?
In Islamic law, zakat is imposed on money that has value and is used in exchange. Cryptocurrencies such as Bitcoin and Ethereum are subject to the same conditions as cash as long as they are used in exchange and have a market value.
Evidence from the Holy Quran and the Sunnah of the Prophet:
1- Zakat on money: Allah Almighty said in the Holy Quran: {And those who hoard gold and silver and do not spend it in the way of Allah - give them tidings of a painful punishment.} (At-Tawbah: 34). This verse indicates that the money that is hoarded must be subject to zakat.
2- God Almighty said: {And take alms from their wealth in order to purify them and sanctify them thereby, and invoke blessings upon them. Indeed, your invocations are a reassurance for them. And God is Hearing and Knowing.} (At-Tawbah: 103)
3- The Prophetic Hadith: The Messenger of Allah, may Allah bless him and grant him peace, said: “Do not pay zakat until you are in trouble” (Narrated by Al-Bukhari). The Hadith indicates that zakat must be paid from money that grows and gains value.
How is Zakat calculated on cryptocurrencies?
Zakat on digital currencies is calculated in the same way as zakat on traditional money:
1. The value of digital currencies in the market must be determined upon the arrival of the year (i.e. the passing of a full Hijri year).
2- If the value of digital currencies at the end of the year exceeds the nisab (which is equivalent to 595 grams of silver), zakat must be paid at a rate of 2.5% of its value.
Are cryptocurrencies considered money subject to zakat?
In the current era, many scholars consider cryptocurrencies to be money like traditional money because of their use in exchange and their market value. Therefore, zakat should be paid on them in the same way as zakat is paid on cash.
Avoid suspicion and investigate what is permissible:
It is the duty of a Muslim to seek what is permissible and avoid doubtful matters, and to be careful to avoid any practices that may lead to monopoly or circumvention of Islamic law. Some issues may arise regarding the use of digital currencies, such as large fluctuations in their value or their use in illegal activities. Therefore, a Muslim must strive to avoid any practices that conflict with the principles of Sharia, so that he can maintain the purity of his financial transactions.
The Messenger of Allah, may Allah bless him and grant him peace, said in a hadith: “What is lawful is clear and what is unlawful is clear, and between the two of them are matters that are ambiguous which many people do not know” (Bukhari and Muslim). Hence, a Muslim must avoid anything that may raise doubts or conflict with clarity and transparency in his financial dealings.
in conclusion:-
Based on the presented Sharia evidence, it can be said that Zakat is obligatory on cryptocurrencies if they meet the conditions of Nisab and the completion of a year. A Muslim who owns cryptocurrencies should track their value in the market and pay Zakat at a rate of 2.5% when the year ends. In case of doubt, it is advisable to refer to scholars or Dar Al-Iftaa for an appropriate Sharia fatwa.
We ask God to guide us to what He loves and is pleased with, and to bless us in our money and our deeds.
