ISLAMIC LEGAL REASONING ON THE LEGITIMACY OF CRYPTOCURRENCY WITHIN THE FATWA OF NAHDLATUL ULAMA YOGYAKARTA: EXPLORING LEGALITY BEYOND BOUNDARIES

Muhammad Lutfi Hakim; Sukron Ma’mun; Saifuddin Herlambang; Ahmad Muhibi; Afriadi Putra; Landy Trisna Abdurrahman

doi:10.33102/mjsl.vol14no1.1056

Authors

Muhammad Lutfi Hakim Faculty of Sharia, Institut Agama Islam Negeri Pontianak, Pontianak 78122, Indonesia https://orcid.org/0000-0001-7287-504X
Sukron Ma’mun Faculty of Sharia, Universitas Islam Negeri Salatiga, Salatiga 50721, Indonesia
Saifuddin Herlambang Faculty of Ushuluddin, Universitas Islam Negeri Syarif Hidayatullah, Jakarta 15412, Indonesia
Ahmad Muhibi Faculty of Ushuluddin and Adab, Universitas Islam Negeri Sultan Maulana Hasanuddin, Banten 42171, Indonesia
Afriadi Putra Faculty of Ushuluddin, Universitas Islam Negeri Sultan Syarif Kasim, Riau 28293, Indonesia
Landy Trisna Abdurrahman School of Graduate Studies, Universitas Islam Negeri Sunan Kalijaga, Yogyakarta 55281, Indonesia https://orcid.org/0000-0003-2181-7477

DOI:

https://doi.org/10.33102/mjsl.vol14no1.1056

Keywords:

Cryptocurrency, fatwā, ilhaqi method, Islamic legal reasoning, Nadhlatul ulama

Abstract

The absence of a comprehensive state legal framework regulating cryptocurrencies has prompted responses from major Islamic organisations in Indonesia. The Majelis Ulama Indonesia (MUI) and Muhammadiyah have prohibited digital transactions through fatwās (legal opinions). However, while the Nahdlatul Ulama (NU) at the central level remains neutral, various regional Lembaga Bahtsul Masail (LBM) have issued conflicting fatwās. For instance, LBM NU Jawa Timur forbids cryptocurrency, whereas LBM NU Yogyakarta permits its use. This article provides an extensively analysis of the fatwā’s content and the Islamic legal reasoning (istinbāṭ) supporting cryptocurrency’s legitimacy. It adopts a socio-legal research approach, employing participant observation, in-depth interviews with key informants, and document analysis. Emphasising the procedural aspects of fatwā formulation by LBM NU Yogyakarta, the study highlights the use of the ilḥāqī method (analogy) to validate cryptocurrency as both a medium of exchange and a commodity. This involves aligning cryptocurrency with established Islamic commercial principles in fiqh (Islamic jurisprudence) literature while acknowledging modern digital advancements. In formulating the fatwā, LBM NU Yogyakarta engaged executive councillors (muṣaḥiḥ), religious leaders (kiais), NU management members, and consulted scholars and practitioners of blockchain technology and cryptocurrencies through discussions in the Bahtsul Masail forum. Despite differing legal arguments among participants that influenced the fatwā’s formulation, it is argued that the decision primarily reflects the executive board’s intent to reconcile Islamic law with modernity. By examining the internal dynamics of fatwā production, this study contributes to global debates on Islamic legal authority, demonstrating how religious institutions reconstruct legitimacy and exercise interpretive power in response to emerging financial technologies in the digital age.

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