The Indonesian Ulema Council (Majelis Ulama Indonesia), a top body of clerics, has ruled that using cryptocurrencies as a means of payment is unlawful in Islam, but trading of digital assets could be allowed, a leader said on Thursday, Reuters reported.

Indonesia bans the use of crypto as a currency, but investment in and trading of digital tokens are allowed in the commodities and futures market, according to the report.

As a means of payment, cryptocurrencies are forbidden according to Shariah law because they carry elements of uncertainty and harm, and are in violation of state laws, MUI’s head of religious decrees Asrorun Niam Sholeh told Reuters.

Trading of cryptocurrencies as a commodity is also unlawful, with the MUI likening it to gambling, because it does not meet Islamic rules, such as for the goods to have a physical form, a clear value, and a known exact amount, among other reasons, he was quoted as saying.

The MUI, however, allows trading of cryptocurrencies that meet Islamic rules, have an underlying asset, and carry clear benefits, Asrorun added.

The commodities exchange allows the trading of hundreds of cryptocurrencies that meet the requirements of safety and good governance of the blockchain system.

The MUI’s decree is not legally binding as it is not part of the government, but its ruling may affect investment decisions by some Muslims.

The total value of cryptocurrency trading in the commodity bourse has reached 370 trillion IDR ($25.96 billion) this year to May, according to the trade ministry.

The total trading at the end of 2020 was valued at 65 trillion IDR. The number of traders has reached 6.5 million up from 4 million.

Cryptocurrencies have gained momentum and popularity among investors. According to a Facts and Factors’ market research report in February, the global cryptocurrency market is expected to reach $5,190.62 million by 2026. The global cryptocurrency market is expected to grow at a compound annual growth rate (CAGR) of 30 percent from 2019 to 2026.

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