Is Crypto Actually Mal? How Islamic Finance Scholars Evaluate Digital Assets as Wealth
A Muslim investor holds $50,000 worth of Bitcoin in a self-custody wallet on a hardware device locked in a drawer.
Is what is in that drawer wealth?
The question is not philosophical or rhetorical. It is one of the most important questions in contemporary Islamic jurisprudence because the answer determines whether that Bitcoin can be bought, sold, inherited, gifted, and subjected to Zakat under Islamic law, or whether it requires a different jurisprudential basis for any of those transactions to be recognized.
Muslim investors encounter this question in a specific and frustrating form. When they ask scholars whether crypto is halal, they sometimes receive the response that crypto is not genuine wealth under Islamic law, making the halal or haram question secondary. When they try to understand what this means they encounter classical Arabic terminology, centuries-old jurisprudential debates, and a scholarly landscape in 2026 that has never been more active, more divided, or more consequential.
This blog provides the complete explanation of what Islamic finance scholars mean by Mal, what Taqawwum means and why it is the central point of scholarly disagreement, how decentralized blockchain networks challenge and fit into classical definitions, and where the 2026 scholarly landscape actually stands on whether digital assets qualify as Islamic wealth.
The Terminology: Mal, Taqawwum, and Mal Mutaqawwim
Before engaging with the substance of the scholarly debate, Muslim investors benefit from understanding three related terms that the literature uses with precision that casual summaries often lose.
Mal refers to the category of things that Islamic jurisprudence recognizes as wealth or property. The question of whether something is Mal is the threshold question about its legal status as property.
Taqawwum refers to whether something has legally recognized Shariah value: whether the Shariah endorses the value that people attribute to a thing as genuine, enforceable, and worthy of legal protection. Something can be widely valued commercially without having Taqawwum if the Shariah treats its value as legally unrecognized.
Mal Mutaqawwim, literally wealth with recognized legal worth, refers specifically to wealth that is recognized as having lawful legal worth under Islamic jurisprudence. This is the category that can be the subject of valid Islamic commercial transactions, inheritance, and Zakat obligations.
These three concepts are related but distinct. Something must first be Mal before the Taqawwum question becomes relevant. And only Mal with Taqawwum, that is Mal Mutaqawwim, can form the valid basis for Islamic commercial rights and obligations. Terminology and doctrinal treatment of these concepts can differ across Hanafi, Maliki, Shafi'i, and Hanbali scholarly traditions, and contemporary scholars working in each tradition approach the digital asset question through different methodological emphases.
One of the Foundational Questions in Digital Asset Jurisprudence
Whether digital assets qualify as Mal is one of the foundational questions underlying the Islamic legal treatment of cryptocurrency. It is not the only foundational question: questions about specific transaction structures, Gharar, Qabd, Maysir, and Riba each have their own independent importance. But the Mal question shapes how all other questions are approached.
If a digital asset is recognized as Mal Mutaqawwim, it can be the subject of valid sales, gifts, inheritance, and commercial contracts under the standard Islamic law frameworks that apply to recognized property. If a digital asset is not recognized as Mal, its commercial treatment requires a different jurisprudential basis, such as the treatment of legally recognized rights Huquq where applicable, which is addressed in the dedicated Huquq section below. This distinction matters because it determines which analytical framework applies rather than simply determining permissibility or prohibition.
What Mal Means: The Classical Definition
The Arabic word Mal literally means inclination or desire and in classical Islamic jurisprudence it describes things toward which human hearts naturally incline and which can be stored and preserved. The Mejelle, the nineteenth century Ottoman civil code that codified Hanafi jurisprudence, defined Mal in Article 126 as: that which human nature inclines to and which can be stored for the time of need.
This definition contains two elements that classical scholars analyzed as essential. The first is natural desirability: the thing must be something that human beings generally value and seek. The second is storability: the thing must be capable of being preserved and retrieved rather than consumed or destroyed in its first use.
For purposes of this analysis, several contemporary scholarly treatments of Mal can be organized around five practical conditions that contemporary Islamic finance scholars including Ali Muhyi al-Din al-Qaradaghi and Hashim Kamali have addressed in their work on modern financial instruments. CoinStudy presents these five conditions as an organization of the contemporary literature rather than as a claim that classical jurists formally articulated them as a standardized five-part test.
The thing must be naturally desired by human beings in the sense of having commercial value. It must be capable of being owned and possessed by identifiable persons. It must be capable of being stored for future use. It must provide benefit in a manner recognized as lawful under the Shariah. And the ownership of the thing must be assignable and transferable from one person to another.
These conditions were discussed with physical commodities, real estate, and gold and silver currency primarily in view. The question for contemporary scholars is whether they can be applied to a genuinely novel category of asset whose characteristics have no direct classical precedent.
What Taqawwum Means: The Legal Worth Question
Taqawwum in classical Islamic jurisprudence refers to the legal recognition of something's value, specifically whether the Shariah recognizes the value that people attribute to a thing as genuine and enforceable.
The classical Hanafi scholars distinguished between Mal Mutaqawwim, wealth with recognized legal worth, and Mal Ghair Mutaqawwim, wealth without recognized legal worth. Only Mal Mutaqawwim can be the subject of valid commercial transactions in Islamic law. If something is Mal Ghair Mutaqawwim, meaning people may desire it and may even pay for it but the Shariah does not recognize its value as genuine, then contracts involving it are invalid, compensation for its destruction is not required, and it cannot form the basis of commercial rights and obligations.
The classical examples of Mal Ghair Mutaqawwim include alcohol, which has market value among those who consume it but which the Shariah does not recognize as having legitimate worth. The Taqawwum concept essentially asks: even if people value this thing and pay for it, does the Shariah endorse the legitimacy of that value?
Applied to cryptocurrency, the question is whether the value that millions of people attribute to Bitcoin, Ethereum, and other digital assets is a value the Shariah recognizes as legitimate and enforceable or a value the Shariah treats as legally unrecognized. This is the central scholarly controversy of the current moment.
Two Broad Positions on the Mal Question
Two broad positions are especially useful for understanding the current debate, although the contemporary scholarly landscape contains important variations within and between them. Scholars differ on the basis and conditions for Taqawwum, on whether cryptocurrency is better analyzed as currency or property, on how different token categories should be treated, and on the role of customary recognition and institutional authorization in establishing Mal status. The two positions below represent the dominant orientations rather than a complete map of the scholarly terrain.
The Position That Cryptocurrency May Not Qualify as Mal Mutaqawwim
The position associated with the June 2026 Darul Uloom Karachi fatwa signed by Mufti Taqi Usmani holds that cryptocurrency does not qualify as Mal Mutaqawwim because it lacks the foundational basis for Shariah-recognized value.
According to the analysis presented in the July 2026 Amanah Advisors research paper presented to the Darul Iftaa Committee of Darul Uloom Karachi, Islam recognizes wealth as property that possesses lawful value, can be owned and transferred, and provides legitimate benefit. The paper distinguished between Mal, which is legally recognized property under Islamic law, and Huquq, which are legal rights that may have monetary value but exist in a distinct legal category.
Scholars holding this position argue that Taqawwum requires a recognized basis for the attributed value that goes beyond market consensus. They argue that the recognized monetary and property status of gold and silver rested on characteristics and forms of recognition that differ materially from decentralized cryptocurrencies, while state-issued currencies derive legal and monetary recognition through institutional frameworks. Neither of these foundations, whether grounded in physical characteristics recognized across historical usage or in state authorization through legal tender frameworks, applies to decentralized cryptocurrencies in the same way.
On the network dependency concern, the scholars holding this position identify structural uncertainty about the basis of value itself as distinct from ordinary investment risk. Bitcoin's economic value is fundamentally dependent on continued operation and social recognition of the Bitcoin network. A permanent cessation of network activity could therefore materially impair or potentially eliminate its economic value in a way that differs from the value foundations of traditional Mal categories.
The Position That Cryptocurrency May Qualify as Mal
The position associated with scholars including Mufti Faraz Adam of Amanah Finance Consultancy, the Shariah Advisory Council of Malaysia, the Fiqh Council of North America, and the Sharia Review Bureau in Bahrain holds that certain cryptocurrencies may qualify as Mal Mutaqawwim based on an analysis that prioritizes social recognition and genuine economic function.
The conceptual foundation for this position draws on the classical concept of Tamawwul, the social willingness of people to treat a thing as wealth. Some classical scholars recognized that social consensus can establish the Taqawwum of something that lacks a specific intrinsic physical property as its exclusive value foundation, as long as that social consensus is genuine, widespread, and not in itself prohibited.
According to the plisio.net analysis from April 2026 summarizing this scholarly position, Mufti Faraz Adam argued that Bitcoin has Taqawwum through its desirability and functions relevant to Thamaniyyah, and pointed to Tamawwul, the social willingness to treat a thing as wealth, as potentially sufficient to establish Mal without physical form. The scholars holding this position also note Bitcoin's seventeen continuous years of operation across multiple economic cycles, regulatory environments, and technological changes as documenting a sustained and genuine pattern of social wealth recognition.
A number of contemporary scholars and Islamic finance institutions working in jurisdictions where crypto is recognized as a legal asset have reached similar conclusions through comparable analytical frameworks, though the specific reasoning and conditions vary across these scholarly positions.
The Huquq Alternative: Rights Rather Than Property
One of the most intellectually significant developments in the contemporary Islamic finance treatment of digital assets is the proposal that digital assets may be better classified as Huquq, legal rights, rather than as Mal, property, while still being legitimately tradeable under certain jurisprudential frameworks. This alternative deserves prominent attention because it prevents the debate from appearing to be purely a question of physical substance.
Classical Islamic jurisprudence gradually expanded the category of tradeable rights over centuries to include things that were not physical property in the traditional sense. Easements over land, rights to water flows, and various non-physical entitlements have been recognized as tradeable under Islamic law in various scholarly traditions.
The June 2026 Amanah Advisors research paper presented to Darul Uloom Karachi's Darul Iftaa Committee specifically engaged with this alternative framework, analyzing whether digital assets qualify as Mal or as Huquq and what the practical implications of each classification are for commercial treatment.
If digital assets are classified as Huquq rather than Mal, they may still be the subject of valid Islamic commercial transactions under the scholarly frameworks that permit trading in rights, while the analysis proceeds on a different jurisprudential basis than the Mal Mutaqawwim framework. This middle-ground classification has been proposed by some contemporary scholars as a way to provide practical Islamic finance guidance for digital assets without requiring complete resolution of the contested Mal question through either the Tamawwul framework or the institutional authorization framework.
The existence of this third analytical possibility is important because it means the consequences of denying Mal status are not necessarily commercial prohibition in every framework. A scholar who concludes that a digital asset is not Mal Mutaqawwim may still find a basis for recognizing certain commercial transactions involving it through the Huquq framework, depending on their methodological approach.
How Decentralized Networks Challenge Classical Frameworks
The genuine intellectual challenge that blockchain networks pose to classical Islamic jurisprudence is not primarily that they are digital. Paper money is not physical in the classical sense either, and scholars accepted paper money as valid Mal through the Tamawwul framework long before cryptocurrency existed. The genuine challenge is three specific characteristics of decentralized networks that have no direct classical precedent.
The Absence of an Identifiable Issuer
Classical jurisprudence developed its understanding of monetary wealth in contexts where money was either a commodity with recognized value or a claim issued by an identifiable authority. Bitcoin has no issuer. No corporation, government, foundation, or individual is responsible for Bitcoin's value or its continuing existence. The network is maintained by a globally distributed set of miners and nodes with no central authority.
Contemporary scholars addressing this characteristic have proposed different frameworks. Those who find the absence of issuer authorization problematic in the Taqawwum analysis argue that recognized monetary status has historically required either intrinsic recognized value or institutional authorization, and that decentralized consensus does not substitute for either. Those who find the absence of a central issuer acceptable argue that the distributed protocol's rules enforced by thousands of independent nodes collectively constitute a form of governance accountability that serves the same function that issuer accountability served in classical analysis.
The Non-Physical Nature of the Asset
A Bitcoin exists as a mathematical state in a distributed ledger. It has no physical form. Classical discussions of Hiyazah and Qabd were largely developed around forms of physical possession and control, creating a question about how those concepts apply to cryptographic control of a private key.
The argument for recognizing cryptographic control as satisfying a contemporary understanding of Qabd rests on functional equivalence: exclusive cryptographic control that prevents all other parties from accessing or transferring the asset is the economic reality that the Qabd requirement was designed to establish in physical contexts. The argument against rests on the classical scholars' specific contemplation of physical taking hold as a component of property right establishment in their primary discussions of these concepts. Contemporary Islamic finance has gradually expanded the Qabd concept to accommodate digital financial instruments in banking and capital markets, but whether that expansion extends to decentralized cryptographic control remains a question different scholarly traditions are resolving differently.
The Network Dependency of Value
Bitcoin's economic value is fundamentally dependent on continued operation and social recognition of the Bitcoin network. A permanent cessation of network activity could therefore materially impair or potentially eliminate its economic value in a way that differs structurally from the value foundations of physical assets.
This network dependency creates a specific concern about the basis of value itself. Classical Mal either had value characteristics that did not depend on particular institutional infrastructure, like gold and silver, or it derived value from issuer obligations backed by legal enforcement systems. The network dependency of cryptocurrency's value does not fit neatly into either classical category, which is why scholars on both sides of the debate identify it as requiring careful attention.
The Five Conditions Applied to Digital Assets
Applying the five contemporary conditions to specific digital assets produces differentiated conclusions rather than a single blanket ruling, which is consistent with the approach of the June 2026 Tazkia Islamic Finance and Business Review that concluded crypto assets cannot be judged uniformly.
Condition 1: Natural Desirability and Commercial Value
Bitcoin, Ethereum, and the major established cryptocurrencies satisfy this condition in 2026 beyond any reasonable scholarly doubt. The commercial value is documented, widespread, and sustained across multiple years. Both scholarly positions on the Mal question acknowledge this condition is met for the major cryptocurrencies.
Where a token lacks identifiable lawful utility, defined rights, meaningful economic function, or other recognized sources of benefit, the Mal analysis becomes more difficult. Speculative demand alone should not be treated as automatically eliminating Mal status, but it also does not independently satisfy the lawful benefit condition.
Condition 2: Capability of Being Owned and Possessed
Cryptocurrency satisfies this condition through the cryptographic private key mechanism. The holder of a private key has exclusive control over the associated digital assets in a way that is functionally analogous to physical possession, in the sense that no party can access or transfer the assets without the private key. The question of how this cryptographic control relates to the classical Qabd and Hiyazah requirements is the subject of ongoing scholarly analysis as discussed above.
Condition 3: Capability of Being Stored
Bitcoin satisfies the practical storability characteristic because control can persist indefinitely through the relevant cryptographic credentials and ledger state. The storability condition is met as a practical matter.
Condition 4: Lawful Benefit
This condition is where the most meaningful scholarly division exists. Scholars who find the lawful benefit condition unsatisfied argue that speculative price appreciation is not a recognized form of Shariah benefit for something that lacks an established basis for its attributed value. Scholars who find the lawful benefit condition satisfied point to genuine utility as a medium of exchange, store of value, and cross-border transfer instrument as documented forms of lawful benefit that go beyond speculative appreciation.
Condition 5: Assignable and Transferable Ownership
Bitcoin can be transferred globally without requiring a centralized clearinghouse or settlement intermediary. Transferability and assignability are met as practical matters, with the qualification that the Qabd question about how transfer is analyzed under classical frameworks remains an active scholarly question.
The Gharar Dimension: Why Network Volatility Differs from Business Risk
Muslim investors frequently ask why Bitcoin's price volatility should create a Gharar concern when all business investments carry price risk. The distinction classical scholars draw is important and often misunderstood.
Ordinary business risk is the risk that a genuine productive enterprise's returns will be less than anticipated because the enterprise's productive activity does not generate sufficient value. This is permissible risk because it is inherent in genuine productive activity rather than artificially manufactured uncertainty about the existence or terms of what is being contracted.
Prohibited Gharar in commercial transactions historically concerned three specific types of uncertainty: uncertainty about the existence of the subject matter of a contract, uncertainty about delivery of the subject matter, and uncertainty about the terms of the transaction. These three types of uncertainty make a transaction fundamentally unfair because one party cannot assess what they are agreeing to.
Cryptocurrency creates two specific Gharar-relevant concerns that are distinct from ordinary business risk. The first is the value uncertainty created by extreme price volatility specifically in commercial contracts where a future payment obligation is denominated in cryptocurrency. If a seller agrees to deliver goods for payment of a specified Bitcoin amount in 30 days, the extreme price volatility creates genuine contractual value uncertainty that is different in character from ordinary price risk in stable currency contracts. This specific contractual value uncertainty is a genuine and legitimate Gharar concern.
The second is the structural uncertainty about the basis of value discussed in the network dependency section above: this concerns the foundational basis of the asset's value claim rather than its market price fluctuations.
Price volatility in secondary markets is not automatically Gharar in the classical sense. A Muslim investor who buys and holds Bitcoin accepting that the price may fluctuate is accepting ordinary investment risk in an asset whose characteristics they have evaluated. The Gharar concern is specific to particular commercial contract structures and the structural network dependency question, not to secondary market price volatility itself.
The 2026 Scholarly Taxonomy: Token Types Matter
One of the most important developments in 2026's Islamic finance scholarship on digital assets is the recognition that a single Mal analysis for all cryptocurrency is jurisprudentially insufficient.
The June 2026 paper in Tazkia Islamic Finance and Business Review proposes a Shariah evaluation matrix assessing five types of crypto tokens against classical fiqh definitions of wealth. The paper's conclusion is that crypto assets cannot be judged uniformly because their Shariah status depends on the clarity of rights, underlying value, delivery mechanisms, benefit legality, and enforceable liability. Asset-backed tokens and certain security tokens are assessed as having the highest potential for conditional permissibility because they represent claims on genuinely defined underlying assets. Utility tokens require stricter analysis due to higher risks of speculation and governance deficiencies. DeFi tokens and pure governance tokens require the most careful examination because their value claims are the most abstract.
The June 2026 INCEIF University paper by Shariah scholar Farrukh Habib proposes a two-tier Shariah taxonomy anchored in the foundational principles of fiqh, arguing that existing classifications driven by technology or financial regulation are inadequate for Islamic finance purposes and that a principled fiqh-based taxonomy is needed for the industry to engage with digital assets in a coherent and Shariah-aligned way.
This taxonomic approach reflects what CoinStudy's HCS methodology implements in practice through individual token analysis rather than blanket asset-class rulings.
How CoinStudy's HCS Analysis Relates to the Mal Question
HCS does not independently determine Mal status. Rather, several HCS dimensions provide evidence relevant to characteristics that contemporary scholars consider when assessing whether a digital asset has recognized lawful benefit, identifiable characteristics, and meaningful economic substance. A scholar could examine the same HCS evidence and reach a different jurisprudential conclusion about Mal status on the basis of other considerations not captured in the HCS scoring. The HCS analysis provides organized evidentiary input to that scholarly determination rather than constituting the determination itself.
The Utility and Real Use dimension at 10% of the HCS score assesses documented genuine economic function and genuine user adoption, which provides evidence relevant to the lawful benefit condition in contemporary Mal analysis. A very low Utility and Real Use score provides evidence that the asset may have difficulty satisfying a lawful-benefit analysis, but it does not by itself constitute a complete jurisprudential determination of Mal status. As CoinStudy has noted elsewhere, Bitcoin's utility does not come from conventional service revenue but from its genuine monetary and settlement functions, and utility does not require a specific revenue model to be genuine.
The Gharar dimension at 15% of the HCS score assesses contractual certainty and operational reliability characteristics that provide evidence relevant to the clarity of rights and identifiable characteristics that contemporary Mal analysis requires. A high Gharar concern from anonymous teams and undocumented mechanisms reduces the evidentiary basis for recognizing the asset's Mal-relevant characteristics.
The Transparency and Governance dimension at 10% of the HCS score assesses whether the token's economic mechanisms are sufficiently public and auditable for participants to genuinely assess what they are entering into, which provides evidence relevant to the knowability conditions that the Mal and Taqawwum analysis requires.
Together these dimensions provide structured evidentiary input to a Mal-relevant assessment of specific tokens. They do not replace the scholarly determination of Mal status, which requires jurisprudential analysis by qualified scholars applying the relevant methodological frameworks of their scholarly tradition.
Anticipated Scholarly Questions: Critical Engagement
Scholar Question 1: If Bitcoin lacks a physical form how can it satisfy the Qabd and Hiyazah requirements that Islamic property rights developed around forms of physical possession and control?
Classical discussions of Hiyazah and Qabd were largely developed around forms of physical possession and control, creating a question about how those concepts apply to cryptographic control of a private key. Does this mean Bitcoin cannot be genuinely owned under Islamic law?
CoinStudy's response: This is one of the most genuinely important and genuinely unresolved questions in the Islamic finance analysis of digital assets and CoinStudy presents it as an open scholarly question. The argument for recognizing cryptographic control as satisfying a contemporary understanding of Qabd rests on functional equivalence: exclusive cryptographic control that prevents all other parties from accessing or transferring the asset is the practical reality that the Qabd and Hiyazah requirements were designed to establish in physical contexts. The argument against rests on the specific development of these concepts around physical possession in classical discussions. Contemporary Islamic finance has gradually developed its treatment of Qabd to accommodate electronic financial instruments in banking and capital markets. Whether that development extends to decentralized cryptographic control is a question that different scholarly traditions are approaching differently in 2026, and CoinStudy recommends formal scholarly consultation on this specific question rather than relying on any analogy from conventional digital finance.
Scholar Question 2: Does the Tamawwul argument risk creating a subjective test that could justify any widely traded instrument regardless of genuine legitimacy?
If widespread social consensus is sufficient to establish Taqawwum, could this principle be used to justify gambling debts, instruments with no utility, or other things that markets value but the Shariah prohibits?
CoinStudy's response: This is a legitimate methodological concern about the Tamawwul argument and scholars advancing this position must address it precisely. The classical understanding of Tamawwul operated within the bounds of Shariah permissibility rather than overriding them. Social consensus can provide evidence for the Taqawwum of something that lacks a single intrinsic physical property as its exclusive value foundation, but it cannot establish the Taqawwum of something that is independently prohibited. Alcohol has genuine social valuation and widespread market price but cannot acquire Taqawwum through Tamawwul because its prohibition is independently established. The Tamawwul argument for Bitcoin's Taqawwum applies to something without direct Shariah prohibition while having genuine widespread social recognition as a store of value and medium of exchange. It is not a general principle that market price automatically confers Taqawwum.
Scholar Question 3: Does the classification of digital assets as Huquq rather than Mal actually provide a basis for permitting commercial transactions, and which scholarly traditions recognize this?
The Huquq alternative is proposed as a jurisprudential basis for permitting certain commercial transactions involving digital assets even if they are not Mal Mutaqawwim. Which classical frameworks support the tradeability of Huquq and how would this apply in practice?
CoinStudy's response: The tradeability of Huquq is itself a matter of jurisprudential development and scholarly difference across the major schools. The classical Hanafi position on the tradeability of Huquq has evolved significantly over time and contemporary scholars differ on the scope of this category. The Huquq framework is presented in this article as an alternative analytical basis that some contemporary scholars have proposed and that the June 2026 Amanah Advisors presentation specifically engaged with, rather than as a settled alternative with established universal permissibility. Muslim investors who want to understand whether specific commercial activities involving digital assets could be analyzed through the Huquq framework should consult qualified scholars in their specific jurisprudential tradition.
Scholar Question 4: The article discusses "two broad positions" but mentions variations within and between them. What are the most important variations that readers should be aware of?
CoinStudy's response: Several important variations exist within the two broad positions that this article cannot fully develop. Within the position recognizing cryptocurrency as potentially permissible, significant variations exist on: whether cryptocurrency is better analyzed as currency Naqd or as property Mal, which determines which conditions of valid exchange apply; whether all cryptocurrencies with genuine utility qualify or only specific categories; and what the conditions of valid Qabd are for cryptocurrency transactions. Within the position finding cryptocurrency's Mal status problematic, variations exist on: whether the concern is absolute prohibition or a more specific concern about certain transaction types; whether the Huquq alternative provides a basis for certain activities; and how different token categories with different characteristics should be analyzed. The June 2026 scholarly output including the Tazkia Islamic Finance and Business Review paper and the INCEIF University taxonomy paper both document the need for more granular analysis that distinguishes between token categories rather than treating all cryptocurrency as a single category.
Scholar Question 5: What are the implications for past crypto transactions if a Muslim adopts the Darul Uloom Karachi position after having transacted in crypto following the permissibility position?
CoinStudy's response: The implications for past transactions can themselves involve jurisprudential questions concerning good-faith reliance, the timing of knowledge, and the treatment of genuine scholarly disagreement. These matters should be referred to a qualified scholar rather than inferred automatically from the later adoption of a different scholarly position. CoinStudy does not provide rulings on the validity or invalidity of past transactions conducted under any scholarly position.
CoinStudy HCS Screening Results
Layer 1: Sharia Red Line Screening
The Layer 1 screening in CoinStudy's methodology assesses individual tokens for prohibited mechanisms at the protocol level. The Mal question is a threshold question that informs the entire analysis context rather than a specific Layer 1 check. CoinStudy's Chairman Dr. Usman Quddus, PhD in Islamic Studies & Finance, has confirmed permissibility for specific tokens including Bitcoin at 98 out of 100 Halal and Ethereum at 91 out of 100 Halal, which reflects his scholarly assessment that these specific tokens satisfy the conditions for Mal Mutaqawwim in the contemporary context while also passing all specific mechanism-based red line checks.
Final Verdict: An Active and Consequential Scholarly Debate
The question of whether digital assets qualify as Mal Mutaqawwim in Islamic jurisprudence is one of the most fundamental open questions in the contemporary Islamic finance treatment of cryptocurrency. It is genuinely contested across scholarly traditions. It is being actively engaged by serious Islamic finance scholarship in 2026. And it is practically consequential because it determines the jurisprudential framework through which all other questions about permissibility are analyzed.
CoinStudy's position, confirmed by Chairman Dr. Usman Quddus, is that specific cryptocurrencies with documented genuine economic function, genuine widespread social recognition, and transparent operational history satisfy the conditions for Mal Mutaqawwim in contemporary Islamic jurisprudence through the analytical framework that recognizes Tamawwul as providing evidence for Taqawwum in the contemporary context. This position reflects the Chairman's scholarly assessment applied through CoinStudy's HCS methodology to specific tokens individually.
The June 2026 Darul Uloom Karachi position, represented prominently by Mufti Taqi Usmani and supported by senior scholars at Darul Uloom Karachi, holds that cryptocurrency lacks the recognized legal basis for Taqawwum in the Hanafi framework that those scholars apply. This is a rigorous position held by widely recognized scholars and must be engaged with honestly by Muslim investors evaluating which scholarly tradition to follow.
The Huquq alternative proposed by some contemporary scholars provides a third analytical path that acknowledges the novelty of digital assets without forcing them into either the full Mal Mutaqawwim category or complete commercial prohibition in every framework.
What is not honest in 2026 is treating any of these positions as universally settled. The 2026 scholarly output from the Tazkia Islamic Finance and Business Review, the INCEIF University Shariah taxonomy paper, the Amanah Advisors Darul Uloom Karachi presentation, and multiple other academic and scholarly sources all confirm that this is a genuine and active scholarly debate in which serious scholars applying rigorous methodology have reached different conclusions.
Muslim investors who understand the Mal debate are equipped to follow their chosen scholarly tradition with genuine understanding of the foundational question rather than adopting a position by default. That understanding is what CoinStudy's educational mission exists to provide.
Read detailed analysis and concepts here:
Understanding Gharar in Crypto
Understanding Maysir in Crypto
Real Risks of Haram Crypto Projects
Disclaimer: This blog is provided for educational and research purposes only based on guidance from CoinStudy's HCS Shariah Board including Chairman Dr. Usman Quddus, PhD in Islamic Studies & Finance. The scholarly positions documented in this blog represent the genuine state of ongoing Islamic jurisprudential debate rather than a settled question. No statement in this blog constitutes a fatwa or a jurisprudential ruling on any past, present, or future transaction. Individual guidance on any specific question including the treatment of past transactions and the determination of Mal status for specific assets requires consultation with a qualified Islamic scholar who can assess your specific circumstances and the scholarly tradition you follow. CoinStudy does not issue personal fatwas or financial advice.