Egyptian Grand Mufti Declares Bitcoin Haram: What It Means for Muslim Crypto Users

Back in December 2017, when Bitcoin was hitting record prices and everyone was talking about getting rich overnight, Egypt’s top Islamic authority dropped a bombshell. Dr. Shawky Ibrahim Allam, the Grand Mufti of Egypt and head of Dar al-Ifta, issued a fatwa declaring Bitcoin and all forms of cryptocurrency haram-religiously forbidden under Islamic law. This wasn’t just a quiet opinion. It was a formal, legally grounded religious ruling that stopped millions of Muslims in Egypt and beyond from touching crypto altogether.

Why Did Egypt Say No to Bitcoin?

The fatwa didn’t just say "crypto is bad." It laid out specific reasons rooted in Islamic finance principles. The core issue? Uncertainty. In Sharia law, any transaction involving gharar-excessive risk, ambiguity, or deception-is prohibited. Bitcoin, according to the fatwa, is built on that kind of uncertainty. Its value swings wildly. No government backs it. No central bank controls it. You can’t hold it in your hand. You can’t touch it. It exists only as lines of code on a computer screen.

The ruling also pointed out that Bitcoin has no recognized status as money by any legitimate financial authority. Islamic law requires currency to have clear value, stability, and official recognition. Bitcoin didn’t meet any of those. It was called an "entirely electronic currency exchanged only via the internet," which made it impossible to verify ownership, track authenticity, or ensure fair exchange.

But the biggest concern wasn’t just economics-it was security. The fatwa explicitly named Bitcoin’s use by terrorist groups like ISIS, drug cartels, and money launderers. In 2017, headlines were full of stories about Bitcoin being used to fund illegal activities because it was anonymous and untraceable. Egypt’s religious leaders saw this as a direct threat to public safety and national security. They argued that allowing crypto meant opening the door to crime, corruption, and financial chaos with no way to stop it.

How Does This Compare to Other Islamic Views?

Not all Islamic scholars agreed. In fact, there’s a deep divide. While Egypt took the hardest stance, other scholars offered more flexible interpretations. Mufti Faraz Adam, a leading expert in Islamic fintech, argued that crypto isn’t inherently haram. He said if a digital asset functions like money-people accept it, trade with it, store value in it-then it should be treated like currency. He even suggested that classical scholars would judge something by its real-world impact, not just its form. Under his view, Bitcoin could be halal if used responsibly and if zakat (the Islamic wealth tax) is paid on holdings.

Then there’s the question of whether crypto is gambling. Some scholars say yes-because people buy Bitcoin hoping it will skyrocket, not because they believe in its utility. That’s qimar, which is forbidden. Others say no-it’s just a new kind of asset, like gold or stocks, and speculation alone doesn’t make it haram.

The Syrian Islamic Council and a few other voices sided with Egypt. But scholars in Malaysia, Indonesia, and even parts of the Gulf have taken a more open approach. Some have even approved specific cryptocurrencies that are backed by real assets or tied to gold. The difference? They’re looking at the future. Egypt was looking at the risks of today.

What Does This Mean for Muslims in Egypt?

For Egyptian Muslims, the answer is simple: avoid crypto completely. No buying. No selling. No mining. No using it to pay for anything. Even setting up a wallet or signing up for a crypto exchange is considered a violation of Sharia. Many banks and financial institutions in Egypt have shut down services related to cryptocurrency because of this ruling. Some Muslims who tried to invest in Bitcoin before the fatwa had to liquidate their holdings or risk being seen as going against religious law.

It’s not just about personal faith-it affects businesses too. A small shop in Cairo that wanted to accept Bitcoin payments had to stop. A tech startup trying to build a blockchain-based remittance app had to pivot or shut down. The ruling didn’t just stop individuals-it froze innovation in a country that could have been a leader in Islamic fintech.

But here’s the twist: not everyone follows it. Some Muslims in Egypt still trade crypto in private, using peer-to-peer platforms or offshore exchanges. They argue the fatwa is outdated. Others say they’re just trying to protect their savings from inflation, which in Egypt has been rising steadily since 2017. Still, they do it quietly. No public announcements. No social media posts. No interviews. The fear of religious backlash is real.

Has Anything Changed Since 2017?

Nothing has changed. As of 2026, Egypt’s position remains the same. The Grand Mufti’s office hasn’t updated, revised, or softened the fatwa-even as Bitcoin has become more regulated, as exchanges like Binance and Coinbase now comply with anti-money laundering rules, and as central banks around the world roll out their own digital currencies.

That’s a problem. The original fatwa banned "any and all uses of cryptocurrency." So even if someone created a Sharia-compliant crypto token that’s audited, transparent, and backed by real assets, Egypt’s ruling would still say no. That’s because the fatwa doesn’t look at the technology-it looks at the concept. And the concept, in their eyes, is broken from the start.

Meanwhile, other countries have moved on. Saudi Arabia’s Islamic finance council now allows certain crypto investments if they meet strict criteria. The UAE has licensed crypto firms and even launched its own digital dirham pilot. Egypt is stuck in 2017.

What About Zakat? Can You Pay It on Crypto?

This is one of the most confusing parts for Muslims who hold crypto. If you believe crypto is halal, you must pay zakat on it-just like you would on gold or cash. The rate is 2.5% per year if your holdings exceed the nisab (minimum threshold, usually around $500-$600 based on gold value). But if you believe it’s haram, paying zakat on it would be like paying tax on stolen goods. That’s a theological nightmare.

In practice, Muslims who follow Mufti Adam’s view pay zakat on their Bitcoin holdings. Those who follow Egypt’s fatwa don’t own any. There’s no middle ground. You either fully accept it and treat it like money, or you reject it entirely and treat it like a dangerous illusion.

Is There a Way Forward?

The debate isn’t over. More scholars are studying blockchain and crypto now. Universities in Jordan and Qatar have launched research centers focused on Islamic fintech. Some are asking: What if we created a cryptocurrency that’s fully compliant? One that’s regulated, transparent, and backed by real assets? Would Egypt still say no?

Maybe. Because the core issue isn’t really about technology. It’s about control. Islam has always emphasized clear ownership, traceable transactions, and protection from harm. Bitcoin removes all that. It gives power to the individual, not to the community or the state. And for a country like Egypt, where religious authority is tied to national stability, that’s terrifying.

But the world keeps moving. Young Muslims in Cairo and Alexandria are using crypto to send money home, to invest in global startups, to escape inflation. They’re not rejecting Islam-they’re trying to make sense of it in a digital age. The fatwa gave them a clear answer. But it didn’t give them a solution.