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Once perceived as incongruent with Islamic beliefs, cryptocurrencies are now being restructured to align with religious guidelines, sparking a crucial question for billions of Muslims worldwide—does crypto adhere to Islamic principles?

"The debate regarding the compatibility of cryptocurrencies with Islamic principles is ongoing, but some religious scholars, including 'The Gatekeeper' of Islamic Finance, Sheikh Dr. Nizam Mohammed Saleh Yaquby, have concluded that certain crypto products can be considered halal investments," shared Islamic Coin co-founder Mohammed AlKaff AlHashmi.

Scholars assert that specific digital assets can be considered halal if they meet strict criteria, including being used as financial assets, avoiding speculation, steering clear of prohibited activities, having a limited supply, enabling zakat payments, incorporating risk-sharing, and providing real value. These assets should also facilitate trades for legitimate services, applying zakat to purchases, mining, and holdings for community benefit.

While progress is made, a formal ruling is essential to designate something halal. Thorough analysis of blockchain tech and smart contracts through an Islamic lens is imperative. "Ensuring Sharia-compliance was a critical consideration during the development of our project," emphasized AlHashmi, co-founder of Islamic Coin.

Previously viewed as non-compliant due to lack of backing in real goods and speculative valuations, cryptocurrencies have evolved. With maturing sectors, certain digital assets and trading now align with Shariah guidelines. Blockchain advancements and improved regulations contribute to this shift.

Mufti Umair Patel, Shariah Lead at Liberty Finance, highlighted their diligence in ensuring compliance. He emphasized that crypto and peer-to-peer mechanisms, when used prudently, can serve as catalysts for economic growth within a compliant framework.

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