Cryptocurrencies and digital assets are financial technologies that exist in today's modern era. A digital asset is something that has value and can be owned. It is a virtual thing that is not in real form and has no physical form. Or in other words, digital assets are digital entities owned by individuals or companies such as digital photos, videos and even songs. Instead, the data is created in the form of a file that resides on a storage device such as a computer or a cloud-based storage network.
However, Islamic finance experts have yet to agree on the legal use of cryptocurrencies and digital assets. This explanation focuses on the law of zakat related to cryptocurrency and digital assets according to Shariah in accordance with current developments.
Several fatwas have been submitted by jurists and international fiqh bodies as well as fatwa institutions in Malaysia against the law of zakat on cryptocurrencies. Among the views of jurists on zakat on cryptocurrency:
- Cryptocurrencies are compared to 'Nuqud' (Currency Dinar and Dirham) and Zakat on it is the same as Zakat 'Nuqud'.
Dr. Ibrahim Abdul Halim Ubadah stated that cryptocurrency is a special type of currency, so it is considered property that must be paid zakat. It is the same as the law of zakat on fiat currency which is compared to the law of zakat on gold and silver currency. It is because the currency has the property of 'ath-thumuniyyah al-mutlaqah'.
- Crypto Currency Is A Digital Asset And The Law Of Zakat On It Is Similar To The Law Of Business Zakat ('Urud Tijarah).
This opinion was decided by the Perlis State Fatwa Committee stating that any ownership of digital assets in the form of Bitcoin is subject to zakat if it is sufficient for haul and nisab. Zakat on digital assets is subject to zakat because above all it is 'Urud alTijarah (merchandise).
- The view of the Selangor Zakat Board (LZS)
Cryptocurrency belongs to the category of 'al-Mal' because it is property that has the nature of al-Mutaqawwim. So it is obligatory to pay zakat based on the general arguments of the obligation of zakat towards 'al-Mal'. The cryptocurrency zakat law depends on the type of category, namely Merchandise ('Urud Tijarah) and Currency (Al-Sarf).
Apart from that, some references also explain that these digital assets can be categorized as currency or commodity. Meaning, if an asset is considered as currency, zakat can be charged based on savings zakat or income zakat. Whereas if a property is considered a commodity, the property is valuable, and if it is traded, it means that business zakat can be applied to a digital asset. To facilitate further discussion, it is appropriate to touch upon the theory of business zakat, savings zakat and income zakat in general.
Therefore, if he has the same nature althamaniyyah, it means that the law of gold and silver will apply. So savings zakat is applicable to that category. While for digital assets in the commodity category, two types of zakat can be charged, namely; business zakat and income zakat (based on Mal Al-Mustafad's theory of zakat) – If the asset is resold for profit which meets the requirements of business zakat.
Among the reasons put forward is because digital assets meet the nature of property and value. While in detail, the basis of digital asset zakat according to the opinion of the interviewed experts is;
i. Determination of digital assets as money or commodities.
ii. Looking at the position of digital assets from the althamaniyyah or al-muthman point of view.
iii. Considering digital assets as business items.
iv. Differentiating a digital asset for business, investment or savings.
Reference Source:
Selangor State Islamic Religious Council
