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Shaykh Sulaymān Salīmullāh ar-Ruḥāylī:
We will move on to something which has preoccupied the people in this time. An affair that has preoccupied the people and has trailed them a lot. It is what is called digital monies or electronic currencies. Before I speak about electronic currencies, I say, O brothers, in the technical terms present today, there is digital monies and electronic currencies. It is necessary to distinguish between them. Digital monies are an electronic means which contain the currencies which are familiar. These new electronic means contain currencies which are familiar/known. It contains dinars. It is a new electronic means, like credit cards with their various types. This in reality is not money in its essence, but only a means. As for the money, then it is the currencies that are present now. This, in terms of its origin, is allowed. However, dealing with it remains a position of examination. Is it a Legislated means or not? However, we do not want to discuss that now.
As for digital currencies, then they are electronic, computer monies, established on complicated accounts. It is difficult to uncover them and their domain is electronic networks. That is, it does not have a domain outside of that. Their domain is the electronic networks. Before I speak about its ruling, it is necessary for us to know that money that is considered in the Legislation is of two types. This is very important. For I have seen many of the students of knowledge-who speak about the digital currencies-do not know the Legislated monies. They mix some affairs with others.
The monies considered in the Legislation are of two types:
one, that it has value in and of itself and the people recognize [using it] in making exchanges. This is called, according to the Jurists, as (النقود السلعية). That is: itself is a commodity, like gold. Gold, O brothers, has value in and of itself, and silver, and copper, and other than that has a value in and of itself. Entering into that is the paper monies when its [value] is returned and backed by gold and silver. In the past, the dinar was backed by gold and silver. The Saudi dinar was backed by silver. So these paper monies are representatives for something that has value, which is gold or silver. This is the (النقود السلعية).
The second type: is the monies that do not have value in themselves and their value is based on the strength of the economy of a country. The warranty/guarantee [for this type of money] is upon the country. Like the paper money today. In your pocket are all papers, dinars. Valued [for example] at ten dinars. Is the value in and of itself? Itself has no value. Is its value backed? Where does it gain its value? From the strength of the economy of Kuwait. It is said about an economy that if it is strong, its currency is strong or firm. If Allah decreed and weakness occurs in the economy, then what will happen to the value of the currency? It will go down. So this does not have any value in and of itself, but its value is based on the strength of the official economy of the country and the warranty/guarantee is upon the country. So this warranty/guarantee is written down. This is called (النقود الإئتمانية). The other one is called (النقود السلعية) because it has value in and of itself, where as this one is (النقود الإئتمانية). They are both monies which are considered in the Legislation. Keep this in your minds, for we will use this in deriving the ruling on this (electronic) currency.
Some of the students of knowledge have allowed digital currencies based on the permissibility of (النقود السلعية). O brothers, according to your mind, are electronic currencies (النقود السلعية) or (النقود الإئتمانية)? We suppose it is (النقود الإئتمانية) because it does not have an existence in the outside world. Electronic, digital currencies are very many, however, the most popular is this bitcoin that is present [nowadays]. It emerged at the end of 2007 and at the beginning of 2008 as an idea. Then it appeared as a reality in 2009 except that it did not gain momentum and prevalence except in the year 2017. It developed a strong momentum in reality.