Indodax Responds to Muhammadiyah Fatwa: Crypto Assets Valid for Investment
Jakarta – Muhammadiyah’s Central Leadership (PP) issued a fatwa stating that cryptocurrency assets can be regarded as valuable digital assets meeting the criteria of fikih mal mutaqawwam in March 2026, and can be utilised as an investment instrument.
However, in Indonesia, the fatwa issued by the Council of Tarjih and Tajdid (Majelis Tarjih dan Tajdid) also affirmed that crypto is not valid for use as a payment method due to high price volatility and potential to cause harm in transactions.
In response, Indodax Vice President Antony Kusuma considered Muhammadiyah’s perspective to provide an important reference for Muslim communities in understanding the position of cryptocurrency assets within Islamic economic principles. The Muhammadiyah fatwa provides clarity for Muslim investors that crypto assets can be regarded as investment instruments within a Sharia-compliant framework.
“This perspective also represents an important momentum to encourage Indonesia’s increasingly mature crypto ecosystem. However, as an investment instrument, crypto assets retain volatile characteristics that investors must understand, so literacy regarding risk management and understanding asset fundamentals becomes important when investing in digital assets,” stated Antony, quoted on Thursday, 12 March 2026.
He explained that the fatwa addresses discussions circulating among Muslim communities in Indonesia regarding the Islamic legal status of crypto assets. With approximately 242 million Muslim residents, Indonesia is the country with the world’s largest Muslim population, making clarity on Sharia principles regarding digital economic instruments such as crypto increasingly relevant to the public.
In the fatwa, Muhammadiyah mentions that permitted crypto activities include long-term investment, spot trading, and productive staking. Meanwhile, practices deemed inconsistent with Sharia principles include futures trading, using interest-bearing debt through leverage or margin trading, market manipulation such as pump-and-dump schemes, and short selling transactions.
Previously, the Indonesian Ulama Council (Majelis Ulama Indonesia/MUI) through the 2021 Ulama Assembly (Ijtima’ Ulama) stated that crypto is invalid for use as a transaction tool as it contains elements of gharar (uncertainty), dharar (harm), and qimar (gambling). However, there is an exception: crypto can be considered valid for buying and selling as a commodity or asset, provided it meets the requirements of sil’ah (commodity) according to Sharia law, possesses clear underlying value, and genuine economic benefit.