Bitcoin and the Financial-Legal Nature of Digital Money

Authors

1 Fiqh and economics, Imam Sadiq University

2 Associate professor, Imam Sadiq University

Abstract

The concept of digital money or electronic currency means encrypted money, in order to facilitate financial affairs and to create money without the presence of intermediaries (banks) and through community members. Digital money does not have any central service or financial institution to control the transfer; because everything is based on peer-to-peer communications. The number of digital money in the world is increasing, including Bitcoin, the most widely used and most valuable electronic currency in the real world. Bitcoin is a public internet system that has introduced a pay-as-you-go payment system and e-money. Bitcoin takes power from users and, from their point of view, Bitcoin is an internet money. It seems that Bitcoin can not be considered as a kind of money; rather, it's a "digital asset." In order to examine bitcoin from the point of view of Islamic jurisprudence, it should first be seen whether it is considered as an asset and property? And then, by explaining the nature of money, it should analyze the bitcoin monetary nature and then examine the issues of Ghorar and loss and disorder in the system and speculation in the Bitcoin network from the Islamic jurisprudence perspective.

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