The Rise of Halal Crypto: Where Scholars Stand in 2026

Ask three respected muftis whether Bitcoin is halal and you can still get three different answers, but the answers now disagree for a much more interesting reason than they did in 2017. The argument has moved off the surface question (is this gambling?) and onto a technical one that Islamic jurists have been arguing about since long before blockchains existed: what counts as property, and what counts as money.

Get that classification right and most of the downstream rulings fall out of it almost mechanically. Get it wrong and you end up with fatwas that contradict each other for no visible reason.

The whole debate hinges on whether a token is mal

In classical fiqh, mal is property, something that can be possessed, has recognized benefit (manfa'ah), and is treated as valuable by people. A separate concept, thamaniyyah, is the quality of being a medium of exchange, which is what makes gold, silver and fiat currency subject to the special exchange rules of bay' al-sarf.

Those two labels drive everything:

If a token is mal but not currency, it is 'urud, a good. You can buy it, sell it at a profit, hold it, and settle the trade over a couple of days without a riba problem.
If a token is currency, you are in sarf territory. Exchanging it for another currency requires immediate settlement (yadan bi yad), and exchanging it for the same asset must be equal for equal, which is the riba al-fadl rule. Lending it at a return becomes riba al-nasiah in the plainest sense, the thing Quran 2:275 to 2:279 addresses directly.
If a token is neither, because it has no recognized benefit and no possession in any meaningful sense, then trading it is trading nothing, and the transaction collapses into gharar and maysir.

Nearly every scholar you can name has staked out a position on that three-way fork. Their conclusions differ because their readings of "recognized benefit" and "possession" differ, not because some of them like technology and some do not.

The prohibitionist camp and what it actually argues

The most cited prohibitionist voice is Mufti Muhammad Taqi Usmani, the Pakistani jurist who chairs the AAOIFI Shariah Board and whose objections carry unusual institutional weight. His argument is that a cryptocurrency has no intrinsic value, no physical existence, no issuing authority standing behind it, and is acquired overwhelmingly for price speculation rather than use. On that reading it fails the mal test, and if it is not property, there is nothing lawful to sell. Darul Uloom Karachi has issued rulings along the same lines.

Egypt's Dar al-Ifta, under then Grand Mufti Shawki Allam, ruled in 2018 that Bitcoin trading is impermissible, leaning heavily on gharar, the absence of a sovereign issuer, and the use of the network in illicit payments. Turkey's Diyanet took a similar position in 2017, keyed to the lack of state backing and to speculative volatility.

The most consequential recent move in this camp came out of Indonesia. Muhammadiyah, one of the country's two mass Islamic organizations with tens of millions of members, issued a Tarjih Council fatwa declaring cryptocurrency trading impermissible, treating it as speculation without a real underlying asset. That mattered because Indonesia is simultaneously one of the largest retail crypto markets in the world.

Read those rulings closely and none of them argue that blockchain technology is haram, or that tokenized real assets are haram. They argue that a bearer token with no claim on anything is not property. That is a narrow claim, and it is why the same scholars are generally comfortable with tokenized sukuk, tokenized gold, and Islamic settlement rails.

Malaysia flipped the classification, and that changed the map

The most influential permissive ruling came from a regulator's Shariah body rather than from an individual scholar. The Shariah Advisory Council of the Securities Commission Malaysia resolved that digital assets traded on registered digital asset exchanges are recognized as mal and may be traded, classifying them as 'urud rather than as currency.

That classification does a lot of work. Treating a token as a good rather than as money removes the sarf constraints, which means spot trading, holding for appreciation, and normal exchange settlement are all fine. It also means zakat treatment follows 'urud al-tijarah, trade goods, at 2.5 percent of market value on assets held with intent to sell.

Malaysia's reasoning is that value in fiqh has always been socially constituted. Fulus, the copper coinage of the classical period, had negligible commodity value and was still treated as property because people accepted it in exchange. Applying urf, customary recognition, to a digital asset with deep global markets is a defensible extension of that logic rather than an invention.

Several individual scholars had already reached permissibility independently. Mufti Muhammad Abu-Bakar's 2018 research for Blossom Finance argued that Bitcoin qualifies as mal in jurisdictions where it is legally recognized, which turned the answer partly into a question of where you live. Dr. Mohd Daud Bakar, the most prominent Shariah board figure in Southeast Asia, has been broadly permissive on the same customary-value reasoning. In the English-speaking world, Mufti Faraz Adam has produced the most granular token-by-token analysis, and Sheikh Joe Bradford has argued the permissive Bitcoin case for a US audience.

Indonesia's conditional middle

Indonesia's national fatwa body MUI landed somewhere between the two camps in its 2021 ijtima ruling. Crypto used as currency: impermissible, because it lacks state sanction. Crypto as a tradable digital commodity: impermissible if it has no underlying and no clear benefit, permissible if it does. That conditional test is arguably the most honest formulation anyone has produced, because it forces you to evaluate assets one at a time instead of ruling on a category of thousands.

The things almost nobody disputes

Behind the headline disagreement there is a large zone of consensus, and it covers most of what retail investors actually do with crypto.

Leverage, perps and margin

Perpetual futures, margin trading and leveraged tokens involve funding payments, interest-bearing borrowing, and enormous gharar over a contract with no delivery. There is no permissive camp here worth mapping. Even scholars who happily permit spot Bitcoin exclude these.

Lending yield

Depositing an asset into a protocol that pays a variable rate to borrowers who post collateral is a loan with a stipulated return. Whether you classify the token as currency or as a good, the fiqh result is the same: a qard that produces benefit for the lender is riba, and the fungible-commodity version is caught too. Interfaces that call it "earn" rather than "interest" do not change the contract.

Meme coins and pure speculation

Where the token has no protocol, no revenue, no utility and no claim on anything, the objection is maysir rather than riba. The gain of one party is exactly the loss of another with no productive activity in between, which is the textbook description of a zero-sum wager. This is one place the old permissive and prohibitionist camps agree with each other.

Staking is the live disagreement

Proof-of-stake reward is where 2026's genuine scholarly split sits, and it is a split with real money attached since Ethereum's transition to proof of stake.

The permissive reading treats validation as a service. You run infrastructure, you attest to blocks, you bear real downside through slashing, and the protocol pays you. Structured that way it resembles ju'alah, a reward for performing a task, and the presence of principal risk defeats the "guaranteed return on deposit" objection.

The restrictive reading looks at how most people actually stake. You send tokens to a custodial provider, your principal is nominally protected, you take no operational role, and you receive a quoted annual percentage yield denominated in the same asset. Functionally that is a deposit paying a rate.

The distinction that most careful scholars now draw is between running or genuinely delegating to a validator with exposure to slashing, and handing tokens to an intermediary that markets a yield number. Liquid staking derivatives add another layer, because you are then holding a receipt token that trades at a floating discount to the underlying and gets re-lent inside other protocols. If you want to stake, the structure you use matters more than the ticker you stake.

Stablecoins

Fully reserved, redeemable, fiat-backed stablecoins raise no new issues beyond those that already apply to holding dollars, and Islamic finance made its peace with fiat long ago. The two things that break that are yield-bearing stablecoins, which pay you the interest earned on the reserve assets and are therefore riba passed through, and algorithmic designs that maintain a peg through market mechanics rather than assets, which reintroduce gharar.

How the other frameworks read the same asset

Crypto is one of the few asset classes where the faith frameworks we cover in our screening methodology disagree about which question even matters.

Christian BRI has no category for "digital asset." The six standard exclusion areas (abortion, pornography, gambling, alcohol, tobacco, anti-family content) are about what a business does, and a base-layer protocol does not do any of them. The BRI-relevant question is what a token's ecosystem funds. Gambling dApps, prediction markets structured as betting, and adult-content payment rails are real exposures for some chains and non-existent for others.

Catholic USCCB guidelines add a lens the others do not. The socially responsible investment framework includes care for creation, reinforced by Laudato Si', which puts proof-of-work energy consumption squarely on the table for Bitcoin in a way it is not on the table for any Islamic analysis. A Catholic institutional investor can reach a negative view on Bitcoin purely on environmental grounds while having no objection to a proof-of-stake network.

Jewish halakhah runs into the ribbis question from an unusual angle. Interest on a loan of money is a biblical prohibition, ribbis d'oraisa. But if a token is a commodity rather than currency, lending it and repaying in kind runs into se'ah b'se'ah, the rabbinic rule against borrowing a quantity of a commodity and returning the same quantity when the price may have risen. So the classification argument in Islamic law has a close cousin in halakhah, arriving at a rabbinic-level concern rather than a biblical one. Bais HaVaad and similar institutions have treated crypto lending as requiring a heter iska structure, the same joint-venture reframing used for conventional business lending.

LDS teaching contains no ruling on any specific asset. What it does contain is Dallin H. Oaks's 1971 warning against speculation, and a long line of counsel about avoiding debt and get-rich-quick schemes. Applied to crypto, that produces a caution about leverage, position size and borrowing to invest rather than a prohibition on holding.

A practical filter that reflects where the scholarship is

You can compress the whole thing into four questions, which is roughly the sequence our crypto screening tool walks through across the 3,300-plus tokens we cover.

Does the asset exist as property under a recognized framework? Deep markets, regulated venues and legal recognition strengthen the mal argument considerably, which is why jurisdiction changes some scholars' answers.
Does the protocol produce something? Block space, settlement, storage and compute are benefits. A name and a mascot are not.
Does the return, if any, come from a service or from a rate? Fees from validation and usage sit differently than a quoted yield on a deposit.
Are you using leverage? If yes, the analysis stops there for every framework on this list.

If you hold crypto alongside equities, run the whole thing together rather than in two mental buckets, since your portfolio-level non-compliant income and purification obligation is calculated across everything you own.

The Bottom Line

There is no consensus in 2026 that Bitcoin is halal, and there is no consensus that it is haram. The genuine division is over whether a bearer token qualifies as mal, with Usmani, Dar al-Ifta Egypt and Muhammadiyah saying no, and Malaysia's SAC, Daud Bakar and a broad group of contemporary scholars saying yes on customary-value grounds. What has actually converged is the layer below that: leverage, lending yield, yield-bearing stablecoins and meme coins draw objections from both camps, and staking splits on structure rather than on the asset. The one thing to carry with you is that the classification question, property or currency or neither, determines your answer to almost every other crypto question you will have, so settle it first with the scholar you follow.

This is educational research rather than a religious ruling or personalized investment advice, and you should confirm your own position with a qualified scholar or advisor before acting on it.