A Critical Analysis of Islamic Law and Fatwa of MUI (Majlies Ulama Indonesia) & NU (Nahdlatul Ulama’) on A Gold-Backed Cryptocurrency (OneGram)

Abstract

Cryptocurrency is a result of recent development of digitalization in the financial transaction. OneGram is a part of it that uses gold instruments to back up and maintain its value stable. The purpose of this study is to explore how Islamic law and MUI & NU, through their fatwa, percieve the OneGram. This research uses a qualitative approach to gain a deep understanding of the OneGram by using secondary data collected from the Quran, hadith, relevant academic journals according to Islamic law and fatwas from both organization. The results of this study state that OneGram is allowed by Islamic law and the fatwa to be used as digital payment system. OneGram is furthermore supervised by shariah supervisory board to avoid gharar (uncertainty) and maysir (gambling) in maintaining its value. The unique fact from this digital currency is that the use of gold in transaction had been applied in the time of Prophet Muhammad SAW. From this digital development, OneGram as a gold-backed cryptocurrency can revive the function of dinar as currency. OneGram transforms the gold value in dinar coin which physically has no flexibility in today transaction to the gold value in digital platform which has flexibility in digital transaction with broad accesability.

Consistency of the Indonesian Ulama Council in Using Istiṣlāḥ as a Method for Legal Istinbath

“…59 It is similar to the methods of qiyas (analogy) and istihsan (juridical preference). 60 In the qiyas method, a mujtahid (Islamic jurist) refers to the consideration of illat (cause) in the determination of legal rulings. In this regard, scholars of usul al-fiqh (principles of Islamic jurisprudence) establish the principle of al-ḥukmu yadūru ma'a al-'Illah wujūdan wa 'adaman (the ruling depends on the presence or absence of illat, the existence of a ruling because of the presence of illat, and the absence of a ruling because of the absence of illat).…”

Abu Ubaid’s Perspectives And The Dynamics Of Digital Currency In Modern Islamic Economics

“…However, cryptocurrencies can be proven to fulfil the requirements of shar'i sil'ah and have clear benefits. In that case, the law is valid to be traded as a commodity and can be accepted as a virtual currency for transaction purposes (Sholeh, Faiz, and Anwar 2022).…”

“…Digital currencies backed by gold can also reduce the danger of speculation and gharar. However, strict supervision by the Sharia supervisory board to ensure and keep it away from aspects prohibited by religion, such as usury, mayshir, gharar, speculation or gambling is still needed (Sholeh, Faiz, and Anwar 2022).…”

“…However, since gold and silver coins in their physical form are not flexible enough to be applied today, other forms of currency have emerged as an alternative. Digital currency or cryptocurrency is one of the most recent forms of currency (Sholeh, Faiz, and Anwar 2022). Cryptocurrency or digital currency results from technological developments in the financial sector (Butary, Butary, and Widya 2022;Veerasingam and Teoh 2023).…”