Coinbase is a digital asset exchange company headquartered in San Francisco, California. The company was founded in 2012 by Brian Armstrong and Fred Ehrsam. Coinbase allows users to buy and sell digital currencies such as Bitcoin, Ethereum, and Litecoin. Coinbase also allows users to buy and sell fiat currencies such as the US dollar and the Euro. Coinbase has been the subject of much controversy in the Muslim world. Some Muslims believe that Coinbase is halal, while others believe that it is haram. The debate has largely been driven by the fact that Coinbase allows users to buy and sell cryptocurrencies, which are not recognized as legal tender by most Muslim countries. The majority of Muslim scholars seem to agree that Coinbase is halal if the user does not use it for gambling or other prohibited activities. However, there is still some disagreement on whether or not Coinbase is halal if the user uses it to buy and sell cryptocurrencies.
As a result of Coinbase's fees for making purchases of cryptocurrencies, retail and institutional investors pay the company. As of the first quarter of 2021, the following data was available for the company. The vast majority of Coinbase's revenue is derived from halal transactions. Customers in 31 states can now borrow with leverage in exchange for fixed interest rates, according to the company. Coinbase's Borrow is not in its portfolio, but rather as a component of its business model. Almost 200 current and former employees have rated the company 4.5 out of 5 stars on Glassdoor. A review of practical Islamic finance indicates that it is unwelcoming to invest in from a Halal perspective. We believe that cryptocurrencies, blockchain technology, and applications created with them are promising, and that PIF is committed to investing in them.
Coinbase does not support HalalChain.
Coinbase has a market capitalization of $65 billion, making it the most valuable company listed on the Nasdaq exchange this week. ( Refrain from haram) The primary business activity of a company must be sharia-compliant. In the case of haram revenue sources, the company's gross revenue cannot exceed 5% of its total income. In addition, the level of interest-bearing debt would be taken into account. A company receives transaction fees, margin trading, and interest on their cash and cash equivalents from each transaction. This is another red flag because they make interest on custodial funds on behalf of their customers. Staking is a complex subject that must be assessed on a case-by-case basis.
Coinbase has invested in COMPOUND, a cryptocurrency project that provides interest-free loans to investors. It is our belief that Coinbase will generate a decent amount of revenue from interest in the next five years. We anticipate that the proportion of revenue derived from these sources will only increase over time.
There are no financial statements that we can audit of Binance, but we suspect that a significant portion of services provided are not Shariah compliant. As a result, we do not wish to invest in Binance Coin from a Shariah perspective.
Taqi Usmani, in his book, explains how short selling is prohibited by divine restrictions as an example of an economic activity. According to Humayon Dar (CEO of a shari'ah advisory firm), short selling is prohibited by all major scholars.
There is no definitive answer to this question as there is no central authority that determines what is and is not halal. However, there are a few general guidelines that can be followed. First, any cryptocurrency that is used to fund activities that are considered haram, such as gambling or pornography, is likely to be considered halal. Second, any cryptocurrency that is used to finance terrorist activities is also likely to be considered halal. Finally, any cryptocurrency that is used to launder money or otherwise support criminal activity is also likely to be considered halal.
Shariah is based on cryptocurrency and is described as Ummah Shariah. Cryptocurrencies are examined in this video. What is the difference between cryptocurrency halal and haram? The currency is also evaluated for its physical backing, whether it is used for speculative or actual goods and services, and whether it meets Islamic banking and finance principles. Crypto lending, according to some scholars, is prohibited because it is a form of speculation and gambling. Others claim that it is permissible because it is carried out on a platform that is regulated and transparent. When deciding whether or not to lend cryptocurrency, the individual's interpretation of Islamic law will play a significant role.
Because most cryptocurrency names are halal, it is reasonable to assume that most cryptocurrency names are. Doge is one of the exceptions, though. Some scholars believe that DOGE is halal, as it is for Bitcoin, but there is still some debate about interpretation. If you follow Islamic rules regarding money and use cryptocurrencies appropriately, you can use them halal.
Ethereum, according to a number of prominent Muslim scholars, is also halal. Because ether is a utility token, it is primarily used to power a network. Currency, in accordance with the laws of the Quran, is not subject to the Shariah.
Before diving into a more in-depth discussion, it's important to remember that all cryptocurrency is neither halal nor haram.
Regardless, bitcoin is not explicitly stated to be haram or halal by Islam. Islamic scholars have the authority to interpret Sharia laws related to finance and money. A cryptocurrency, in short, is a digitized form of currency. They are based on blockchain technology and are ideal for value transactions because they do not incur forgeries or double-spending. Many people believe that bitcoin is incompatible with Islamic principles. Islamic finance, according to Islamic law, is the use of financial instruments that are compliant with Islamic law. Financial statements cover banking, lending and borrowing, business transactions, profit and loss sharing, and so on.
According to Prophet Muhammad Abu-Bakar, bitcoin is permissible because it is a store of value for people. Bitcoin is being investigated by Islamic scholars in relation to its credibility. Some Muslims consider it permissible while others consider it halal, while others consider it to be speculative and uncertain. A crypto investment is not haram despite its flaws. According to Shaykh Haitham al-Haddad, bitcoin cannot be considered a currency because it does not have an intrinsic value. Although cryptocurrencies are illegal in the Kingdom of Saudi Arabia, they are legal tender. The validity of cryptocurrencies is not defined by Islamic law. Scholars believe bitcoin investment is permissible as long as it is used to fund halal activities. Some argue that it is haram because it is volatile, risky, and has no intrinsic value.
Recently, an Indonesian Council of Islamic Scholars fatwa against cryptocurrencies was published, stating that they pose uncertainty, wagering, and harm risks. According to Asrorun Niam Sholeh, head of religious decrees for the Indonesian Council on Islamic Affairs, cryptocurrencies are illegal for trading because of their mixed nature, which violates Islamic finance principles that govern investment, money management, and currency. Nonetheless, as long as bitcoin investments do not involve any haram activities such as gambling or investing in things that are prohibited by Islam, bitcoin does not violate Islamic finance principles. Bitcoin is considered halal investment if the person is not involved in any haram activities related to it.