In a step that could have far-reaching impact, Malaysia’s Sharia Advisory Council has approved cryptocurrency trading.
The announcement came during the “Invest Malaysia 2020” event, on July 7.
The Council works under the umbrella of the Securities Commission. It seeks to ensure that financial dealings comply with Sharia (Islamic law).
Cryptocurrency in Malaysia
Malaysia’s Securities Commission started regulating the cryptocurrency industry within the country on 15 January last year, according to news.Bitcoin.com
Given that, three cryptocurrency exchanges have received operating licenses in the country.
They are: Luno Malaysia, SINEGY Technologies, and Tokenize Technology, news.Bitcoin.com added.
The founder of Malaysia’s first official cryptocurrency exchange, SINEGY Technologies, of course welcomed the decision.
Kelvyn Chuah stressed that the decision is of huge importance as over 60% of the country’s population are Muslims, Cointrust reported.
Indeed, Muslims constitute about 60% (19.43 million) of current population of approximately 32 million in Malaysia.
The groundbreaking announcement could encourage more of the nearly 1.6 billion Muslims around the world to venture in the cryptocurrency market.
Sharia and Cryptocurrency
Notably, the question of Cryptocurrency compliance with Sharia is a hot topic and has been subject to several studies.
The Japanese digital media giant Okwave Inc. in collaboration with Universiti Teknologi Malaysia (UTM), conducted one of these studies, in January.
It concluded that Cryptocurrency usage in Muslim countries are amongst the lowest worldwide, according to news.Bitcoin.com.
It cited fear that cryptocurrencies might not be compliant with Sharia rules as the main reason behind such reluctance.
Furthermore, another much publicised study by an Islamic scholar concluded that Cryptocurrency is permissible under Sharia law.
Muhammad Abu-Bakar of Blossom Finance in Indonesia declared that digital currency meets the Sharia rules, the Independent reported.
The study has been published in April 2018, and within less an hour the value of Bitcoin jumped more than $1.000.
Some analysts believe that the study contributed to the surge.
Moreover, last year, Iran proposed the creation of a single Islamic cryptocurrency.
The move surprised participants of the Kuala Lumpur (KL) Summit 2019, as reported by The Malaysian Reserve.
Tehran envisages the proposed Islamic cryptocurrency as a tool to diminish the global dominance of the US dollar, the newspaper added.