Financial and Economic Effects of Virtual Currencies and their Role in Defining Islamic Rulings on Them

Abstract

This study aimed to address virtual currencies and their economic effects in an attempt to identify the role of such economic effects in defining Islamic rulings on them, inducing their economic effects and risks, and showing the extent to which Islamic ruling is affected thereof.  The study revealed that the great economic effects of virtual currencies were money laundry, local and global financing of terrorism, as well as the negative effects on the state's monetary and fiscal policy. Added to this are the negative economic effects and risks, such as the related fluctuation and the lack of Sharia and legal criteria for issuing them, bearing in mind that their issuance without legal cover might lead to global economic corruption. This makes prohibition the appropriate Islamic ruling on them, which would enable the state to issue them and control their circulation easily. The most important recommendations in this this study were that researchers should conduct in-depth studies on virtual currencies, that the state should be concerned with their issuance, and that Islamic jurists should read more about them to come out with a practical fatwa in this regard.