Crypto between the state and Sharia: Who has final authority?
Main Article Content
Abstract
This paper addresses the tensions caused by the intersection of state, Sharia, and the global market that arises due to the unique nature of cryptocurrencies. Historically, using cryptocurrencies challenges state control over the money supply and raises questions of compliance with Sharia, specifically the prohibitions of gharar (uncertainty) and maysir (gambling). The complexity of fatwas in this system has been overlooked by focusing primarily on them as isolated normative references with no connection to state regulations and market realities. This research views fatwas on the interoperability of digital markets and state authorities. The central research question is: how does Sharia-compliant governance of cryptocurrency in the Muslim world, combined with digital markets and state authorities, coexist with moral-religious principles and legal authority? The research hypothesizes three protagonists interacting in a triangular governance relationship: (1) fatwas represent ethical boundaries in the context of maqāṣid al-syarī‘ah; (2) the state represents a pro-active, positive religiously-oriented regulation; and (3) the market represents ethical compliance. The model of proposed co-regulation presents a robust conceptual synthesis of cryptocurrency and Sharia compliance theories with practical use for market operators, fatwa institutions, and religious policymakers, to develop a Sharia-compliant digital financial ecosystem.
Downloads
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
This open-access article is distributed under a Creative Commons Attribution (CC-BY) 4.0 license.
You are free to: Share — copy and redistribute the material in any medium or format. Adapt — remix, transform, and build upon the material for any purpose, even commercially. The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
No additional restrictions You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
How to Cite
Share
References
Abd Wahab, N., et al (2024). A proposed framework of Islamic inheritance and estate planning of digital assets: The Malaysian case of crypto assets. ISRA International Journal of Islamic Finance, 16(2), 45–64. DOI: https://doi.org/10.55188/ijif.v16i2.713
Abou Adel, M. A., Elhalafawy, A. I., Khodier, G. A., Alrefai, A. A., & Khalifa, S. H. (2025). Unsettling the norm: A posthumanist reading of sameness and differences in Kathryn Erskine’s Mockingbird. Theory and Practice in Language Studies. DOI: https://doi.org/10.17507/tpls.1511.03
Abouelnour, M. M., et al . (2024). Interactive communicative discourse in the Holy Qur’an: A deliberative approach. Edelweiss Applied Science and Technology, 8(5), 1819–1830. DOI: https://doi.org/10.55214/25768484.v8i5.1915
Adel, M. A. (2023). Aesthetics of religious coexistence and tolerance in Shafak’s Turkish novel. International Journal of Islamic Thought, 24, 108–118. DOI: https://doi.org/10.24035/ijit.24.2023.273
Adel, M. A., Alhourani, M. I., & Kormpas, G. (2024). The Muslim diaspora’s nationalism and identity in Kamila Shamsie’s Home Fire. Hamdard Islamicus, 47(2), 117–135. DOI: https://doi.org/10.57144/hi.v47i2.802
Al-Rai, A. F., et al (2026). Violation of the right to privacy through artificial intelligence entities under the UAE’s anti-cybercrime act. Research Journal in Advanced Humanities, 7(1). DOI: https://doi.org/10.58256/9xebs084
Al-Rai, A. F., et al (2026). The legal regulation of cybercrimes related to character assassination under the Jordanian and French legislation. F1000Research, 15, 359. DOI: https://doi.org/10.12688/f1000research.177079.1
Al Adwan, M. (2026). Employing AI technologies in drafting public–private partnership contracts in the field of healthcare improvement. Qubahan Academic Journal, 6(1) DOI: https://doi.org/10.48161/qaj.v6n1a2287
Agur, I., Ari, A., & Dell’Ariccia, G. (2022). Designing central bank digital currencies. Journal of Monetary Economics, 125, 62–79. DOI:https://doi.org/10.1016/j.jmoneco.2021.05.002
Alexander, C., Chen, D., & Imeraj, A. (2023). Crypto quanto and inverse options. Mathematical Finance, 33(4), 1005–1043. DOI: https://doi.org/10.1111/mafi.12410
Andriansyah, Y. (2023). Analysis of fatwas by the National Sharia Board-Indonesian Council of Ulama on the stock market. Millah: Journal of Religious Studies, 525–552. DOI: https://doi.org/10.20885/millah.vol22.iss2.art9.
Anggita, M., Aslam, B., & Hussain, S. (2025). The role of Islamic law in regulating cryptocurrency and blockchain technology: A case study of Indonesia’s regulatory framework. Sharia Oikonomia Law Journal. DOI: https://doi.org/10.70177/solj.v3i2.2086
Arief Jailani, M., & Muneeza, A. (2023). Crypto assets: The need for Shariah screening criteria for digital assets in Malaysia. International Journal of Islamic Economics and Finance Research, 1(1), 27–47. DOI: 10.53840/ijiefer111
Arpangi, S et al (2025). Integrating Australian employment law practice in support of people with disabilities in Indonesia. Khazanah Hukum, 7(2), 236–254. DOI: https://doi.org/10.15575/kh.v7i2.44946
Asif, M., et al (2025). Honor killing and the cycle of social influence: A study of the Pakistani bride through Albert Bandura’s social learning theory. Research Journal in Advanced Humanities, 6 (2). 1-14. DOI: https://doi.org/10.58256/pgj52m46
Basworo, H. (2023). The paradigm of law as a social engineering in the existence of crypto asset monitoring: What and how? Pena Justisia: Media Komunikasi dan Kajian Hukum, 22(3), 185. DOI: https://doi.org/10.31941/pj.v22i3.3482
Bergolla, L., Seif, K., & Eken, C. (2021). Kleros: A socio-legal case study of decentralized justice and blockchain arbitration. SSRN Electronic Journal. DOI: http://dx.doi.org/10.2139/ssrn.3918485
Bossu, W., Itatani, M., Margulis, C., Rossi, A. D. P., Weenink, H., & Yoshinaga, A. (2020). Legal aspects of central bank digital currency. IMF Working Papers, 20(254).DOI: https://doi.org/10.5089/9781513561622.001
Cappai, M. (2023). The role of private and public regulation in the case study of crypto-assets: The Italian move towards participatory regulation. Computer Law & Security Review, 49, 105831. DOI: https://doi.org/10.1016/j.clsr.2023.105831
Chami, Y., & Khater, M. H. (2025). The influence of Maliki jurisprudence on the French civil law in terms of the opposability of the relative effect of contract to third parties: A comparative study. Malaysian Journal of Syariah and Law, 13(1), 123–133. DOI: https://doi.org/10.33102/mjsl.vol13no1.1157
Chami, Y., et al (2025). Abuse of rights: A comparative study between Mālikī jurisprudence and positive law. Ahkam: Jurnal Ilmu Syariah, 25(2), 415–428.DOI: https://doi.org/10.15408/ajis.v25i2.44606
Chami, Y., et al (2026). Legal discourse analysis: Foundations of forensic linguistics and its applications in legislation and litigation. Research Journal in Advanced Humanities, 7(2). https://doi.org/10.58256/g09ere43
Chong, F. H. L. (2021). Enhancing trust through digital Islamic finance and blockchain technology. Qualitative Research in Financial Markets, 13(3), 328–341. DOI: https://doi.org/10.1108/QRFM-05-2020-0076
Securities and Exchange Commission. (2024). Securities and Exchange Commission. In Federal regulatory guide (p. 398). CQ Press. DOI: https://doi.org/10.4135/9781071920541.n19
Dungga, W., Muhtar, M. H., & Djaafar, L. (2023). The assessment of Indonesia’s religious courts in resolving Shari’ah banking disputes according to the principles of justice. Manchester Journal of International Economic Law, 19, 179–193.
Dwivedi, Y. K., et al (2022). Metaverse beyond the hype: Multidisciplinary perspectives on emerging challenges, opportunities, and agenda for research, practice and policy. International Journal of Information Management, 66, 102542. DOI: https://doi.org/10.1016/j.ijinfomgt.2022.102542
El-Erian, M. et al (2026). The role of artificial intelligence in enhancing corporate governance and achieving sustainable development. Access to Justice in Eastern Europe, 9(1), 208–232. DOI: https://doi.org/10.33327/AJEE-18-9.1-a000177
Elhalafawy, A. I. et al (2025). From text to performance: A Lehmannian study of postdramatic strategies in Churchill’s Escape Alone and Stephens’ Light Falls. Journal of Language Teaching and Research, 16, 1824–1832. DOI: https://doi.org/10.17507/jltr.1606.04
Faizi. (2023). Are cryptocurrencies ḥaram? A critical analysis toward MUI’s fatwā. AL-IHKAM: Jurnal Hukum & Pranata Sosial, 18(2), 420–442 DOI: https://doi.org/10.19105/al-lhkam.v18i2.8290
Farrand, B. (2024). How do we understand online harms? The impact of conceptual divides on regulatory divergence between the Online Safety Act and Digital Services Act. Journal of Media Law, 16(2), 240–262. DOI: https://doi.org/10.1080/17577632.2024.2357463
Ferreira, A., & Sandner, P. (2021). EU search for regulatory answers to crypto assets and their place in the financial markets’ infrastructure. Computer Law & Security Review, 43, 105632 DOI: https://doi.org/10.1016/j.clsr.2021.105632
Goodman, J. (2019). Monetary sovereignty. Cornell University Press. DOI: https://doi.org/10.7591/9781501736704
Guillaume, F., & Riva, S. (2023). Blockchain dispute resolution for decentralized autonomous organizations: The rise of decentralized autonomous justice. In Blockchain and private international law (pp. 549–641). Brill Nijhoff. DOI: https://doi.org/10.1163/9789004514850_022
Gumati, M. R. (2024). Digital sovereignty and state power: Indonesia’s approach to digital platforms regulation. JISPO Jurnal Ilmu Sosial dan Ilmu Politik, 14(1), 99–126. DOI: https://doi.org/10.15575/jispo.v14i1.39500
Huang, S. S. (2021). Crypto assets regulation in the UK: An assessment of the regulatory effectiveness and consistency. Journal of Financial Regulation and Compliance, 29(3), 336–351 DOI: https://doi.org/10.1108/JFRC-06-2020-0062
Katterbauer, K., Syed, A. M., Cleenewerck, T., & Yılmaz, F. (2022). Sharia compliance of cryptocurrencies: Data-driven Sharia compliance assessment. SSRN Electronic Journal DOI: https://doi.org/10.54045/talaa.v2i2.691
Khater, M. H. (2023). International perspective on securing cyberspace against terrorist acts. International Journal of Sociotechnology and Knowledge Development, 15(1). DOI: https://doi.org/10.4018/IJSKD.318706
Khater, M. H. (2024). Insulting religions from the perspective of international law: A descriptive and analytical study. International Journal of Islamic Thought, 25, 70–77. DOI: 10.24035/ijit.25.2024.286
Khan, S. N. (2023). The legality of cryptocurrency from an Islamic perspective: A research note. Journal of Islamic Accounting and Business Research, 14(2), 289–294. DOI: https://doi.org/10.1108/JIABR-02-2022-0041
Kokorin, I. (2023). The anatomy of crypto failures and investor protection under MiCAR. Capital Markets Law Journal, 18(4), 500–525. DOI: https://doi.org/10.1093/cmlj/kmad019
Krstic, M., Vanhee, T., & Chablani, V. (2022). Tax issues for cryptocurrency-related businesses in Bahrain and the United Arab Emirates: The two hotbed crypto jurisdictions in Middle East. Finance and Capital Markets, 23(2). DOI: https://doi.org/10.59403/j0d32r
Kumar, M., Nikhil, N., & Singh, R. (2020). Decentralising finance using decentralised blockchain oracles. In 2020 International Conference for Emerging Technology (INCET) (pp. 1–4). IEEE. DOI: 10.1109/INCET49848.2020.9154123
Van der Linden, T., & Shirazi, T. (2023). Markets in crypto-assets regulation: Does it provide legal certainty and increase adoption of crypto-assets? Financial Innovation, 9(1), 22. DOI: 10.1186/s40854-022-00432-8
Lo, C. (2022). Disrupting the crypto disruption. In The digital renminbi’s disruption (pp. 37–55). Emerald Publishing Limited. DOI: https://doi.org/10.1108/978-1-80455-330-520221005
Martino, E. D. (2024). Monetary sovereignty in the digital era: The law and macroeconomics of digital private money. Computer Law & Security Review, 52, 105909. DOI: https://doi.org/10.1016/j.clsr.2023.105909
Murau, S., & van ’t Klooster, J. (2023). Rethinking monetary sovereignty: The global credit money system and the state. Perspectives on Politics, 21(4), 1319–1336. DOI: https://doi.org/10.1017/S153759272200127X
Paramole, K. O., & Sanni, M. O. (2022). Islamic legislation on wealth acquisition: A critical examination of crypto-currency. Millah: Journal of Religious Studies, 771–796. DOI: https://doi.org/10.20885/millah.vol21.iss3.art6
Pohle, J., & Voelsen, D. (2022). Centrality and power: The struggle over the techno-political configuration of the internet and the global digital order. Policy & Internet, 14(1), 13–27 DOI: https://doi.org/10.1002/poi3.296
Qutieshat, E. et al (2026). Algorithmic justice and the challenges of the digital rule of law. IDP. Revista de Internet, Derecho y Política, (45), 1–18.
Qutieshat, E.,et al (2026). Governing legal chatbots: Ethics, professional responsibility and liability in comparative perspective. Research Journal in Advanced Humanities, 7(1). DOI: https://doi.org/10.58256/ppfy4k96
Rahman, I., et al (2024). Harmonization of digital laws and adaptation strategies in Indonesia focusing on e-commerce and digital transactions. Innovative: Journal of Social Science Research, 4(1), 4314–4327. DOI: https://doi.org/10.31004/innovative.v4i1.8240
Rakhmonova, M. (2022). Analysis of the legal practice of Uzbekistan and EU countries in the field of legal regulation of blockchain and cryptocurrency. Общество и инновации, 3(11/S), 270–282. DOI: https://doi.org/10.47689/2181-1415-vol3-iss11/S-pp270-282
Sturgeon, T. J. (2021). Upgrading strategies for the digital economy. Global Strategy Journal, 11(1), 34–57. DOI: 10.1002/GSJ.1364
Sudarmo, S., et al (2025). Critical study of the implementation of the right of self-determination in protecting Indonesia’s environmental and economic sovereignty. In S. Ta Wee, A. Sanders, N. Long, K. L. G. Chan, A. Gani, T. P. Yazid, & Z. Rafique (Eds.), E3S Web of Conferences, 611, 05002. DOI: https://doi.org/10.1051/e3sconf/202561105002
Suryani, I. et al (2023). Integration of Islamic law in regional development in Indonesia. JURIS (Jurnal Ilmiah Syariah), 22(1), 1. DOI: 10.31958/juris.v22i1.8770
Whyte, S. (2023). Are fatwas dispensable? Examining the contemporary relevance and authority of fatwas in Australia. Oxford Journal of Law and Religion, 11(2–3), 314–342. DOI: https://doi.org/10.1093/ojlr/rwac015
Widjaja, M., Gaby, & Havidz, S. A. H. (2024). Are gold and cryptocurrency a safe haven for stocks and bonds? Conventional vs Islamic markets during the COVID-19 pandemic. European Journal of Management and Business Economics, 33(1), 96–115. DOI: https://doi.org/10.1108/EJMBE-05-2022-0135
Zetzsche, D. A., Annunziata, F., Arner, D. W., & Buckley, R. P. (2021). The Markets in Crypto-Assets Regulation (MiCA) and the EU digital finance strategy. Capital Markets Law Journal, 16(2), 203–225. DOI: https://doi.org/10.1093/cmlj/kmab005