Are NFTs Halal? Digital Ownership, Royalties and Speculation

Ask five Shariah scholars whether NFTs are permissible and you will get five answers, partly because they are answering five different questions. One is thinking about a JPEG of a cartoon ape. Another is thinking about a tokenized event ticket. A third is thinking about somebody flipping a blind-mint allocation four hours after buying it. The token standard is identical in all three cases, and the ruling is not, so the useful version of "are NFTs halal" breaks into three separate questions about digital ownership, royalties and speculation.

What you actually own when you buy an NFT

Most of the fiqh disagreement traces back to people assuming the wrong thing about what you actually buy, so the mechanism comes first. An ERC-721 token is a row in a smart contract's ledger. The contract stores a mapping from a token ID to an owner address, plus a tokenURI function that returns a string. That string is a pointer. It usually resolves to a JSON metadata file (name, traits, an image field), which itself points to the image, hosted on IPFS, Arweave or, embarrassingly often, an ordinary web server the project pays for monthly. ERC-1155 works the same way but lets one contract issue many token IDs with multiple copies each, which is why it dominates game items and editions.

Two consequences matter for Shariah analysis.

First, the artwork is almost never on-chain. A handful of collections (Autoglyphs, Nouns, Chain Runners) store the image or its generator in contract bytecode, so the asset is genuinely self-contained. The rest own a pointer, and if the hosting lapses or the IPFS pin drops, the token still exists while the image does not. That is a real defect in the mabī' (the object of sale) and it is worth checking before you buy anything.

Second, buying an NFT transfers no copyright by default. Copyright law does not move because a ledger entry moved. Some projects attach explicit licenses (Yuga Labs granted BAYC holders broad commercial rights, and CC0 collections like Nouns and Cryptoadz put the art in the public domain), but the default under ERC-721 is that you own a transferable ledger position pointing at art the creator still owns. So the thing being sold is a haqq (a right), not a physical object.

The māl question: can a ledger position be property?

The scholarly split here is inherited almost entirely from the crypto debate rather than being specific to NFTs. The restrictive position, associated with Mufti Taqi Usmani and the Darul Ifta of Jamia Darul Uloom Karachi, holds that a purely digital token is not māl mutaqawwim, meaning it lacks the recognized value and physical or contractual substance that Shariah requires of property. On that reading the token is a record of numbers, so a sale of it is not a valid bayʿ, and the analysis stops before you ever get to the artwork.

The permissive position, argued in detail by Mufti Faraz Adam and Amanah Advisors and reflected in the approach of Malaysia's Securities Commission Shariah Advisory Council on digital assets, leans on ʿurf khāṣṣ, the recognized custom of a particular community. If a defined community treats something as valuable, transacts in it and enforces it, it can qualify as māl. NFTs arguably clear that bar more comfortably than a payment coin does, because an NFT is closer to a documented right of access or a license than to a synthetic currency.

Indonesia's DSN-MUI took the middle route in Fatwa 140/DSN-MUI/XI/2021 on crypto assets, ruling that assets exhibiting gharar fāhish and maysir are impermissible while assets with a clear underlying and a defined benefit can be traded as ḥaqq māli, a recognized property right.

Notice the doctrine-versus-inference line here. The doctrine is settled and uncontested: sale requires a known object, gharar fāhish invalidates a contract, riba and maysir are prohibited outright by the Qur'an at 2:275 to 2:279 and 5:90. Whether a tokenURI pointer satisfies the definition of māl is an inference, a contemporary ijtihād applying old categories to a new object. Anyone who tells you the NFT ruling itself is a matter of clear text is overstating the case in either direction.

The image content rule most people skip

Even scholars who accept NFTs as property still have to look at what the image is, and the straightforward part comes first. If the token depicts nudity, gambling imagery, alcohol or tobacco branding, occult themes or anything else prohibited in substance, the content is impermissible and no amount of clever token engineering fixes it. Gambling-adjacent collections are common, and NFT casino memberships that entitle you to a revenue share from a wagering house fail on maysir before you reach any art question.

The harder part is tasweer, the classical discussion of depicting animate beings. Hanafi and much of the traditional Salafi position restricts full-bodied images of humans and animals outside recognized necessities, which is a live problem for the entire profile-picture category, from Bored Apes to Pudgy Penguins to Azuki. Other contemporary scholars distinguish between a three-dimensional sculpture, a hand-produced painting and a machine-generated image on a screen, treating the last as outside the ʿillah of the original prohibition (idolatry). Because the underlying position on photographs and cartoons differs by school and by scholar, the NFT answer differs too, and you should take your own madhhab's line here rather than shopping for the answer you want.

Collections built on calligraphy, generative abstraction, architecture, landscapes or pure utility (tickets, domains, memberships) avoid this branch entirely.

Royalties: is EIP-2981 a valid entitlement?

Creator royalties are the part people assume is the halal-friendly feature, and the mechanics are less solid than the marketing suggested. EIP-2981 (ERC-2981) is a signaling standard. A contract implements royaltyInfo(tokenId, salePrice) and returns a recipient address and an amount. It does not move money and it cannot force anyone to. Enforcement lives entirely with the marketplace settling the trade. After OpenSea sunset its Operator Filter and Blur built its market share on zero or optional creator fees, royalties on most Ethereum collections became something buyers choose to pay. Creators who actually want enforcement have moved to transfer-restricted standards such as Limit Break's ERC-721C, which blocks transfers to operators that do not honor the fee.

Shariah-wise, the royalty stream on secondary sales is a fee condition attached to the resale of a right, not an interest charge, so riba is not the objection. The genuine questions are two. Is the royalty a valid contractual condition binding the future buyer, given they never signed anything with the creator? And is the amount known at the time of contracting? Where the rate is coded, disclosed and actually enforced by the venue, it looks like a stipulated fee in a permissible sale and most contemporary Shariah advisors treat it as acceptable. Where the rate is nominally 7.5% but optional in practice, what you are looking at is a voluntary tip, and a project's revenue projections built on that stream carry a gharar problem for anyone buying into the project as an income asset.

If you are buying an NFT partly because a royalty stream flows to you, verify enforcement at the marketplace level before you treat that cash flow as real.

Flip speculation, gharar and maysir

The strongest objection to the NFT category as it actually trades is behavioral rather than structural. Blind mints, where you pay a fixed price for an unrevealed token whose traits are randomized afterward, are the clearest problem. You are paying a known price for an unknown object with a wide dispersion of outcomes, which is a textbook gharar fāhish setup and looks structurally like a lottery ticket. Some projects reveal traits before sale or price by trait, which resolves it. Most do not.

Then there is the market itself. Monthly NFT sales volume has fallen roughly 70% from the 2021 to 2022 peak, wash trading inflated a large share of the historical numbers on incentive-paying venues, and floor prices on collections with no cash flow are pure sentiment. Buying and reselling within hours with no intention of use is closer to gambling on price than to trading an asset for its benefit, and Shariah advisors who permit NFTs in principle routinely add exactly this caveat about intention and holding behavior.

Two adjacent products deserve a flat warning. NFT-collateralized lending on protocols like NFTfi and Blend involves interest-bearing loans, which is riba al-nasī'ah regardless of the collateral. And fractionalized NFT products that split a token into fungible shares raise both a maysir question and a securities question that most projects have not answered.

Where the other traditions land

Christian BRI screening does not have a māl category, so it looks straight through the token to the content and the business: pornographic or gambling collections are excluded, an NFT of a landscape is not. Catholic USCCB investment policy is written around corporate conduct rather than digital collectibles, so the exclusions bite only when the issuer is a gambling or adult-content operator. Halakhic analysis, in the framing used by bodies such as Bais HaVaad, tends to accept a digital right as property more readily than the restrictive Hanafi position does, while treating interest-bearing NFT lending between Jews as ribbis requiring a heter iska. The LDS caution here is the oldest of the four, and it is about behavior: Dallin H. Oaks warned in 1971 against speculation dressed up as investment, which describes NFT flipping better than it described anything in 1971.

What to actually check before you buy

Work through this in order. Is the content permissible under your school, including the tasweer question if it depicts animate beings? Is the image stored on-chain or pinned on Arweave or IPFS rather than a company server? Is the object fully known at purchase, meaning no blind mint or randomized reveal? If there is a royalty or revenue share, is it enforced at settlement and is the rate disclosed? Is the issuing project's business itself halal, since an NFT membership in a gambling house inherits the gambling? And honestly, is your holding period measured in months of use or hours of price watching?

How FaithScreener treats NFTs and NFT-adjacent tokens

Individual NFTs are not screened as securities, but the tokens and platforms behind them are. Marketplace and infrastructure tokens (BLUR, APE, LOOKS, IMX and similar) run through the same three-axis process we apply to the rest of the 3,300-plus tokens in the crypto database, covering the business activity of the issuer, the token's own mechanics including any interest-bearing or gambling function, and the project's conduct and distribution profile. Consensus and staking treatment follows the Shariah Review Bureau taxonomy, which our methodology sets out in full. If you screen under BRI, USCCB, Halakhic or LDS rules rather than Shariah, the framework comparison shows exactly where the exclusions diverge on this category.

The Bottom Line

There is no single ruling on NFTs because the token standard is a container, and the container tells you almost nothing. A CC0 calligraphy piece stored on-chain, bought to hold and licensed cleanly, sits comfortably inside the permissive scholarly position, and even the restrictive Karachi view on digital māl is a reasoned inference rather than a settled text. A blind-mint animal avatar bought at 2am to flip by breakfast fails on gharar, likely fails on tasweer under Hanafi rules, and fails on intention under every framework surveyed here. The enforceable-royalty story is also weaker than it sounds, since EIP-2981 only signals and marketplaces choose whether to pay, so do not value an NFT on a royalty stream you have not verified is actually collected at settlement.

This is educational research rather than a religious ruling or personalized investment advice, so confirm any specific holding with a qualified scholar or advisor before you act on it.