Bitcoin leads in the cryptocurrency market, outpacing its rivals and serving as a decentralized means of exchange

energy consumption levels. Within the framework of Islamic finance, the current research investigates whether

or not cryptocurrencies comply with Shariah law, with a particular focus on Bitcoin. The present study examines

the Shariah compliance of cryptocurrencies, with a special emphasis on Bitcoin, within the context of Islamic

banking. This paper employs qualitative content analysis of original Islamic sources, theoretical perspectives,

and case studies to evaluate the ethical and legal compliance of digital currencies. The study emphasizes the

prospective incorporation of blockchain technology into Islamic institutions, hence promoting ethical financial

conduct in accordance with religious principles. The findings indicate that Bitcoin adheres to fundamental

Islamic principles by excluding haram elements such as riba (usury), gharar (uncertainty), and maysir

(gambling), while also possessing characteristics akin to conventional currency. Nonetheless, concerns regarding

its environmental impact, potential changes, and adherence to regulations limit its acceptability. The findings

exhibited a significant interest in cryptocurrencies. Alternative currencies are gaining popularity due to factors

such as user-friendliness, transparency, and decentralization. Different types of currencies are going to challenge

conventional banks and other financial institutions in the near to medium term by offering more efficient trading

mechanisms, such as national fiat currencies and commodity-based currencies like gold (Zhang et al., 2024).

Following the swift advancement of technology, some individuals expressed concerns regarding its application

and regulation, especially in regions with divergent ethical standards (Sestino et al., 2025). In evaluating a new

financial instrument for compliance with Shariah law, Islamic banking implies strict adherence to fundamental

religious and ethical principles.

Initially, Islamic banking opposed the concept of imposing interest on loans and some forms of commerce,

including gambling and speculation. Contemporary Islamic sciences have endeavored to incorporate traditional

of Bitcoin, which is present without a physical form and is not regulated by any government, and is highly

susceptible to misuse for illegal activities (Al-hussaini et al, 2019). However, some argue for the necessity of

using Bitcoin as a new medium in the financial world because Bitcoin shares characteristics with other currencies

globally and possesses additional qualities not found in other currencies, such as anonymity, transfer speed,

immutability through blockchain, and greater resistance to theft (Hamadou & Suleman, 2024). This study aims

to establish a clear framework for each instrument and business sector, serving as a standard for regulators,

Islamic banks, and institutional investors considering the utilization of digital currencies in Shariah-compliant

contexts.

This paper is structured as follows. Section 2 discusses the literature review, and Section 3 describes the research

methodology. Section 4 presents the findings and results. Section 5 provides the conclusion, including a

extensively rebranded as "cryptocurrency". Bitcoin was the inaugural peer-to-peer electronic currency enabling

individuals to transfer funds directly via the internet, circumventing banks or other financial entities (Brichta,

2025).

Various cryptocurrencies may use one or more of the following technological mechanisms to generate and

authenticate new currency: proof-of-work, proof-of-stake, cryptographic hashes, and Byzantine fault tolerance

(Al-awamy et al., 2025; Touloupou et al., 2025). Miners are individuals or groups who generate bitcoins and

facilitate transactions. They monitor transactions to prevent individuals from using the same funds multiple times

(Vlahavas et al., 2024). Most cryptocurrency systems, by contrast, use a decentralized architecture that operates

with little or no central authority. This differs from currencies issued by governments (Verdier, 2024).

Bitcoin and Ethereum remain the pre-eminent cryptocurrencies, but emerging alternatives are acquiring

information (Sarode et al., 2021). To prevent double spending, the nodes verify each other's transactions.

Multiple nodes are concurrently attempting to resolve a mathematical issue. The node that resolves the issue first

is permitted to broadcast the transaction on the blockchain (Kang, 2023). The rivalry to solve the puzzle renders

publishing transactions costly. This approach mitigates the challenge of incurring double expenditures.

The transaction method of Bitcoin is not completely anonymous; instead, it is pseudonymous. Users disclose

their wallet's public keys in conjunction with their transactions. These public keys serve as enduring identifiers

(Cipher, 2025). Decentralization is a fundamental characteristic of Bitcoin that has garnered significant interest

from both users and service providers. This aspect is typically regarded as a fundamental distinction between

Bitcoin and conventional currency, which is issued as legal tender and regulated by central banks (Shah et al.,

2023). This trait leads people to perceive Bitcoin as an unregulated currency, referring to it as an electronic cash

It is important to know whether Bitcoin is centralized or decentralized to set standards for judging its Shariah

compliance. The Islamic economic philosophy forbids the accumulation of wealth and power among a limited

things like money laundering, tax evasion, theft, and the acquisition of illegal goods and services. Anonymity

hides identifying information from transactions, which lets criminals avoid responsibility and accountability

when there are no rules or monitoring in place (Davis & Arrigo, 2021). Bitcoin addresses these issues through a

cryptographically secure distributed ledger that enables users to authenticate the legitimacy of transactions

without the necessity of an intermediary or regulatory authority (Karisma & Moslemzadeh Tehrani, 2023).

Different pseudonymous addresses for individuals and organizations exist, permanently stored in the ledger and

not directly linked to their real-world identities. A Bitcoin address does not directly connect to a legal person.

However, transactions that use regulated-wrapper services usually involve identity verification in line with the

know-your-customer concept, which means they are not anonymous (Garg, 2024; Temo, 2023). Numerous

articles on forums, conferences, and social media have sought to determine the compliance of Bitcoin and other

(Baur & Dimpfl, 2021). A system must have superior value stability to be recognised as a "medium of exchange"

in Islamic finance (Anjum, 2022). One reason for the volatility of Bitcoin's price is that it saw significant

fluctuations, frequently exceeding 100% daily, during the initial weeks following its inception. The absence of

liquidity and the novelty of speculation contribute significantly to volatility (Jindai, 2024). The price of Bitcoin

may indicate the market's perception of its future viability and potential for success. The significant price

volatility indicates that it is a high-risk and speculative asset (Fang et al., 2022).

Price volatility remain a concern. The asset's value has fluctuated significantly compared to established fiat

currencies due to speculation. Bitcoin's volatility renders it an insufficient store of value or unit of account,

leading to debates regarding its designation as money (Bongini et al., 2025). Recently, prices have exhibited

significantly reduced volatility. The volatility's tendency to incite speculation fosters immoral activity and has

to foster speculative activity make it challenging to accept. Despite its potential to be marketed as a commodity,

it remains ambiguous whether it is a freely transferable currency or possesses inherent utility (Izadin et al., 2025).

The emergence of various cryptocurrencies indicates a continual exploration by individuals for alternatives to

established currencies and solutions for contemporary economic challenges. Numerous new cryptocurrencies,

referred to as "altcoins", emerged in the early 2010s (Roy & Lakshmi, 2025). Litecoin, Namecoin, Peercoin,

Gridcoin, Ripple, Neo, Cardano, and Dogecoin were among them (Pernagallo, 2024). Cryptocurrencies can be

classified into many classes according to their cryptographic underpinnings. Each category typically contains

multiple implementations that compete against one another and employ analogous design concepts. Analyzing

Islamic Perspectives on Cryptocurrency

Meyer (2001) present a widely recognised definition of money that delineates its functions into three principal

roles which are measuring, storing, and transferring value. The Islamic monetary system regards money as

possessing equivalent responsibilities, pointing out that it's a currency that facilitates borrowing, trading,

The primary sources for this study are the scriptures, ijtihad, and ijma; the secondary sources include books,

journals, the internet and websites. The researchers used a content analysis of the materials to assess the narrative