Muhammadiyah Says Crypto Allowed as Investment, Not Currency<\/p>\n
Jakarta. Muhammadiyah has ruled that cryptocurrency can be used as an\ninvestment asset but not as a means of payment, according to a fatwa\nissued by its religious council, Majelis Tarjih and Tajdid.<\/p>\n
The ruling states that crypto assets may be recognized as valuable\ndigital property that meets the Islamic jurisprudence criteria of mal\nmutaqawwam, meaning assets that hold legitimate economic value and can\nbe utilized as investment instruments.<\/p>\n
However, the organization emphasized that cryptocurrencies are not\npermissible as a payment method in Indonesia due to their high price\nvolatility and the potential risks they pose in transactional use.<\/p>\n
Responding to the ruling, Antony Kusuma, vice president of Indonesian\ncrypto exchange INDODAX, said the position provides important guidance\nfor Muslim investors seeking clarity on crypto within a sharia\nframework.<\/p>\n
\u201cThis fatwa provides clarity for Muslim investors that crypto assets\ncan be viewed as investment instruments within a sharia framework. The\nview also marks an important momentum for the continued development of\nIndonesia\u2019s crypto ecosystem,\u201d Antony said in a statement on\nThursday.<\/p>\n
He added that crypto assets remain highly volatile and require\ninvestors to understand the associated risks.<\/p>\n
\u201cAs an investment instrument, crypto assets have volatile\ncharacteristics that investors must understand. Literacy in risk\nmanagement and understanding the fundamentals of digital assets are\ncrucial when investing in crypto,\u201d he said.<\/p>\n
The fatwa also outlines which crypto activities are considered\npermissible and which are not under sharia principles. Permitted\nactivities include long-term investment, spot trading, and productive\nstaking.<\/p>\n
Meanwhile, practices deemed inconsistent with Islamic principles\ninclude futures trading, the use of interest-bearing leverage or margin\ntrading, market manipulation such as pump-and-dump schemes, and short\nselling.<\/p>\n
The ruling addresses ongoing discussions among Indonesian Muslims\nregarding the legal status of cryptocurrency. With roughly 242 million\nMuslims, Indonesia is the world\u2019s largest Muslim-majority country,\nmaking clarity on the religious standing of emerging digital financial\ninstruments increasingly relevant.<\/p>\n
Previously, the Majelis Ulama Indonesia (MUI) concluded during its\n2021 Ijtima\u2019 Ulama that cryptocurrency is not valid as a payment\ninstrument because it contains elements of gharar (uncertainty), dharar\n(harm), and qimar (gambling). However, the council allowed crypto to be\ntraded as a commodity or asset, provided it meets sharia requirements as\na legitimate good with a clear underlying value and tangible economic\nbenefits.<\/p>\n
Public interest in digital assets continues to grow. Data from the\nFinancial Services Authority (Indonesia), or OJK, show that Indonesia\nhad around 20.70 million crypto investors as of January 2026.<\/p>\n
The figure suggests that digital assets are increasingly being\nconsidered as an alternative investment option amid global economic\nuncertainty, highlighting the importance of risk management and\nportfolio diversification among investors.<\/p>\n
As one of Indonesia\u2019s early crypto exchanges, INDODAX said it remains\ncommitted to strengthening public literacy on responsible investing. The\nplatform is registered and supervised by OJK and applies compliance\nmeasures such as Know Your Customer (KYC) and Anti-Money Laundering\n(AML) standards to support a secure, transparent, and sustainable crypto\ntrading ecosystem.<\/p>\n
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