Indonesia’s Islamic organisation Nahdlatul Ulama in East Java has issued a “fatwa” against the use of cryptocurrency in the country declaring it forbidden under Islamic law.
The religious body reached the decision after a discussion as it reportedly said the use of cryptocurrency is not legal under Islamic Sharia law.
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The move comes as Indonesians have shown a huge interest in the new digital currency as reports claim the country will not ban cryptocurrencies, however, it will ensure it is not used for illegal activities.
Indonesia’s minister of trade Muhammad Luthfi had asserted that although it wouldn’t prohibit cryptocurrencies but the regulations will be tightened.
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Reports say bitcoin, dogecoin and ethereum are considered assets in Indonesia which can be traded but cannot be used as means of payment. Domestic exchanges in the country have been witnessing a boom in cryptocurrency with millions of citizens involved in trading.
Last month Bitcoin futures exchange-traded fund (ETF) was launched on the New York Stock Exchange as its value hit a new high to reach above $66,000. The currency had gained 50 per cent last month and reportedly 450 per cent over the past year.
The currency had fallen drastically in May after China had cracked down on trading and mining cryptocurrencies. However, El Salvador declared it a legal tender in September.
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The US Treasury Department had earlier expressed concern over the rise of cryptocurrencies as it pointed out that it could undermine the effectiveness of sanctions. The department said it faces “new challenges including rising risks from new payments systems, the growing use of digital assets, and cybercriminals.”
(With inputs from Agencies)