Mufti Taqi Usmani ruled all cryptocurrency is haram because it is not mal. Is this the final word on the matter?

Mufti Taqi Usmani's concern for Muslim investors and his decades of contribution to Islamic finance deserve genuine respect. However his specific fatwa has been formally analyzed by CoinStudy's Shariah Board Chairman Dr. Usman Quddus, PhD in Islamic Studies and Finance, who has identified a significant internal logical difficulty within the Grand Mufti's own system of thought.

The Grand Mufti's fatwa ruled crypto impermissible on one specific basis: that cryptocurrency is not mal because it consists of fictional digital numbers recorded in ledgers rather than any real thing. The chairman's response is not simply that other scholars disagree. It is that this specific argument is internally inconsistent within Mufti Taqi Usmani's own framework.

The chairman's core observation is this. Fiat currencies like the rupee and dollar as they exist in modern bank accounts are also digital ledger entries. They are numbers recorded in computer systems with no independent physical existence. Yet Mufti Taqi Usmani himself accepts fiat currencies as mal and even permits salam contracts in currencies, which presupposes their mal status. If being a digital ledger entry makes cryptocurrency not mal, then the same characteristic that the Grand Mufti uses to exclude crypto would also exclude the digital rupee in every bank account in the world including Islamic banks. Since the Grand Mufti does not draw this conclusion for fiat currency, his argument requires identifying a relevant difference between the two cases that has not been adequately established.

The chairman extends this observation to carbon credits, which are also entirely non-physical entries in electronic registries with no tangible material existence. Islamic finance has not generally excluded these from property status simply because they are non-material and digitally recorded.

The chairman identifies three arguments that the Grand Mufti would need to establish for his position to be logically coherent. First, he would need to prove that physical tangibility is required for mal, but this would exclude copyrights, software licenses, and intellectual property rights that Islamic jurisprudence widely accepts. Second, he would need to prove that mal requires being a liability against an institution, but gold, land, and commodities are not institutional liabilities and are nonetheless recognized as mal. Third, he would need to prove that cryptocurrency has no genuine human utility whatsoever, but value transfer, censorship resistance, and borderless settlement are genuine human utilities that if present would make denying mal status logically very difficult.

The chairman also draws a critical distinction that the fatwa appears to collapse. There is a fundamental difference between concluding that dealings with cryptocurrency are impermissible under current conditions due to volatility, speculation, or investor harm, and concluding that cryptocurrency is not mal at all. These are categorically different conclusions. Alcohol is recognized as mal in Islamic jurisprudence despite its trade being impermissible for Muslims. The impermissibility of a dealing does not make something not mal. Even if all the Grand Mufti's concerns about crypto volatility and speculation are valid, the correct conclusion from those concerns is that specific dealings may be impermissible, not that the entire asset class does not qualify as property.

CoinStudy's position, supported by Dr. Usman Quddus's formal scholarly analysis, is that the Grand Mufti's fatwa identifies real and important concerns about cryptocurrency markets that deserve serious engagement, but the specific argument deployed to rule it not mal faces significant internal logical difficulties within the Grand Mufti's own system of thought. Muslim investors deserve to know this scholarly assessment exists and to engage with it honestly rather than treating one respected scholar's opinion as a settled question that admits no further examination.