Cryptocurrency Controversy in MUI and Contemporary Ulama Fatwas: Analysing the Legal Inference and Economic Implications of Sharia

Abstract

Background:  Cryptocurrency has sparked significant legal debate in Islamic jurisprudence. In Indonesia, the MUI issued a restrictive fatwa declaring crypto haram as a currency and invalid as a commodity, while other contemporary scholars (e.g., Muhammadiyah, NU) have adopted more flexible stances, including conditional permissibility as an investment asset. This divergence reflects a methodological tension in contemporary fiqh muamalah between textualist caution and contextual adaptability.

Purpose: This study analyzes the istinbat methods used by MUI and contemporary Indonesian ulama in determining crypto’s Sharia status, compares divergences between fatwas, and examines their economic implications for digital finance and Muslim welfare.

Methods: Qualitative normative legal research with a library approach. Primary data: MUI’s Ijtima’ Ulama Fatwa Commission VII (2021), Muhammadiyah’s fatwa (2026), Syrian Islamic Council, and Dar al-Ifta’ Mesir. Secondary data: journals and regulations. Content analysis using comparative and maqasid al-shariah frameworks.

Results: The findings show that MUI uses a bayani approach based on nash qath‘i, qauli, and sadd al-dzari‘ah, resulting in a restrictive fatwa that prohibits cryptocurrency as a currency and invalidates it as a commodity unless it meets the conditions of sil‘ah syar‘i (physical existence, definite value, valid ownership, and delivery) and is free from gharar, dharar, and qimar. By contrast, LBM PWNU Yogyakarta employs the ilhâqî method and permits crypto under certain conditions, while Muhammadiyah (2026) recognizes crypto as mal mutaqawwam—legitimate valuable property—for long-term investment, spot trading, and productive staking, but forbids its use as a payment method. Economic data reveal a paradox: although fatwas discourage crypto, the number of crypto investors in Indonesia reached 21.37 million in March 2026, while Islamic financial inclusion remains low at 13.41 percent. This gap is attributable to low Sharia literacy (43.42 percent) and a lack of competitive digital investment alternatives.

Implication:  Diverging fatwas create legal uncertainty. A harmonized framework through collective ijtihad—integrating fiqh, blockchain technology, and empirical data—is needed to produce a classification-based approach (e.g., asset-backed stablecoins vs. purely speculative crypto).

Originality:  This study offers comparative analysis of three Indonesian fatwa institutions (MUI, Muhammadiyah, NU), linking istinbat methodology differences to concrete economic implications including investor behavior and Islamic financial inclusion, contrasting with prior descriptive studies lacking empirical economic assessment.