Crypto Fatwa in the Tokenisation Era: Time for a New Paradigm

Over the past few years, the discourse on cryptocurrency has almost always stalled on one question: is it halal or haram? Yet, while the debate remained unresolved, the world moved on. Blockchain is no longer synonymous with speculative assets; it is evolving into a new infrastructure for the financial system through asset tokenisation, transforming ownership rights of real assets into digital representations. Government bonds, sukuk, equities, gold, property, and investment funds are now being tokenised as the foundation of a new financial market. This shift is not merely a technological innovation but a paradigm shift. Institutions like the Bank for International Settlements (BIS), the International Monetary Fund (IMF), and the European Central Bank (ECB) now view tokenisation as the bedrock of financial system modernisation. Through Project Guardian, the Monetary Authority of Singapore is testing the tokenisation of bonds, investment funds, and bank deposits, while BlackRock’s BUIDL fund demonstrates how government securities can be represented as digital tokens. The global focus is no longer on whether blockchain is necessary, but on how to build governance that ensures security, transparency, and trust. Indonesia is entering a similar phase. Since the transfer of crypto asset oversight to the Financial Services Authority (OJK) under the P2SK Law, digital assets have entered a phase of institutionalisation. With over 20 million consumers, transaction values exceeding Rp650 trillion, and one of the highest crypto adoption rates globally, the main challenge is no longer accepting or rejecting digital assets, but building a governance framework that transforms this large market into a safe, productive, and high-integrity ecosystem. It is in this context that the 2021 Ijtima’ Ulama Fatwa on cryptocurrency deserves a reread, not to be pitted against technological progress, but to be contextualised as blockchain evolves from a speculative instrument into financial infrastructure. The relevant question is no longer whether cryptocurrency is halal or haram, but how to ensure that asset tokenisation adheres to Sharia principles, is legally sound, technologically secure, and provides economic benefit. The fatwa serves as an ethical compass. When it was issued, the market was dominated by highly volatile cryptocurrencies with minimal underlying assets and rampant speculation. In that context, the fatwa declared the use of cryptocurrency as currency impermissible due to its conflict with Indonesian positive law and the presence of gharar (uncertainty) and dharar (harm). However, the fatwa did not close the door entirely. It stated that digital assets meeting the criteria of sil’ah (a valid commodity), possessing a clear underlying asset, and being free from gharar, dharar, and qimār (gambling) are permissible to trade under Sharia. This formulation indicates that the object of assessment is not the blockchain technology itself, but the economic substance of the transaction. What is tested is the existence of the underlying asset, the clarity of ownership rights, the contract structure, and the potential for harm. The fatwa is thus more accurately understood as an ethical compass for financial innovation rather than a rejection of technology. Tokenisation is often perceived as an entirely new phenomenon. Economically, however, it is an evolution of a long-familiar concept: asset securitisation. If securitisation transforms assets or cash flows into tradable instruments, tokenisation converts the representation of ownership or beneficial rights over those assets into a digital form on a blockchain. What changes is not the economic right, but the medium of its representation. In Islamic finance, this logic has long been recognised through various asset-based and asset-backed sukuk structures, where investors obtain economic rights over real assets through valid contracts. Tokenisation brings the same principle into the digital era. The difference lies not in the economic substance but in the infrastructure. Centralised registries, custodians, and settlement processes are replaced by distributed ledger technology, enabling faster, more transparent, and programmable recording of ownership and transfer of rights. On this basis, this article proposes a ‘Digital Securitisation Paradigm’, a perspective that views tokenisation as a digital evolution of asset securitisation, rather than an entirely new concept. This paradigm shifts the focus of assessment from the technology to the substance of the legal and economic relationships being constructed. This paradigm has significant implications for fiqh muamalat. Sharia assessment no longer stops at the question of whether blockchain is acceptable, but moves to the substance of the legal and economic relationships built. What must be tested is the legality of the underlying asset, the clarity of ownership rights, the validity of the contract, the transparency of rights transfer, and freedom from riba (usury), gharar, maysir (gambling), tadlis (fraud), and dharar. This approach aligns with the fiqh principle that consideration is given to the essence and objectives of a contract, not merely its form or medium. From this perspective, the 2021 Ijtima’ Ulama Fatwa actually has broad room for adaptation. When the fatwa requires an underlying asset, clarity of the transaction object, and the absence of gharar, dharar, and qimār, it is essentially laying the ethical foundation for the development of digital assets that have a real economic basis. This approach is also consistent with the thinking of Douglas North, that economic growth is largely determined by the quality of institutions that can create certainty of rights and reduce transaction costs.