How Halal and Haram Crypto Partnerships Affect Shariah Compliance.
In the fast-changing world of cryptocurrency, innovations continue to emerge at a rapid pace. As the crypto ecosystem expands, we're witnessing an increasing number of partnerships and alliances within the industry. These collaborations often bring significant benefits, such as enhanced liquidity, improved technological infrastructure, and broader market reach. They can lead to more robust platforms, increased adoption, and potentially greater stability in the volatile crypto market.
However, this trend of partnerships has raised important questions for Islamic investors who must adhere to Shariah principles. A particularly complex issue has come to the forefront: What happens when a halal (permissible) cryptocurrency forms a partnership or alliance with a haram (forbidden) one? This scenario presents a unique challenge for Muslim investors trying to navigate the crypto space while maintaining compliance with Shariah principles.
Potential Complications of Halal-Haram Crypto Relationship
This situation directly relates to a fundamental principle in Islamic ethics, as stated in Surah Al-Ma'idah, verse 2:
وَلَا تَعَاوَنُوا۟ عَلَى ٱلْإِثْمِ وَٱلْعُدْوَٰنِ
Meaning: "And do not cooperate in sin and aggression."
The verse emphasizes the importance of avoiding any form of cooperation or assistance in activities considered sinful or transgressive.
Further emphasizing this point is the Islamic legal maxim: "الإعانة على المحرم محرمة", which translates to "Assisting in what is prohibited is itself prohibited." This legal maxim emphasizes that any form of cooperation or support in haram matters is also prohibited. By partnering with a haram cryptocurrency, the halal coin may indirectly enable or benefit from activities that are deemed haram, such as speculation, gambling, or involvement in industries that produce or promote prohibited products or services.
However, this does not necessarily mean the Shariah status will change due to the collaboration. Several factors must be considered to determine the Shariah status of the cryptocurrency if such a collaboration occurs.
The intention behind the collaboration and its potential benefits to the wider Muslim community are important considerations. It can be judged based on various events:
- Partnerships in Shariah-compliant activities
When a cryptocurrency or blockchain project engages in a partnership for activities that do not raise any Shariah concerns, there are generally no issues from an Islamic perspective. These could include:
- Collaborative technological development
- Joint marketing initiatives for halal products or services
- Partnerships aimed at improving blockchain infrastructure
- Partnerships with companies engaged in non-Shariah compliant activities
A more nuanced situation arises when a Shariah-compliant cryptocurrency project partners with a company that engages in activities not compliant with Islamic law. However, if the service provided to this company is general and does not violate Shariah principles, it may still be permissible. Examples include:
- Providing tokenization services
- Acting as a data provider
- Offering blockchain infrastructure support
In these cases, the approach is to focus on the nature of the service itself rather than the overall activities of the partner company. If the core service being provided has no inherent Shariah issues, the partnership can be considered acceptable from an Islamic perspective.
This view is based on the principle that the essence of the action ('ain 'amal) itself is what matters, and if this essence does not contradict Shariah principles, the partnership can be deemed permissible.
- Partnerships Involving non-shariah compliant Services
The most problematic scenario from an Islamic perspective is when a partnership involves a company engaged in non-Shariah compliant activities, and the collaboration itself centers around services or products that violate Islamic principles. Examples might include:
- Partnerships focused on interest-based lending platforms
- Collaborations involving gambling or speculative activities
- Joint ventures in industries prohibited in Islam
In such cases, the tendency is to view these collaborations as non-compliant with Shariah. Muslim investors and users are advised to avoid involvement in such partnerships, as they directly contribute to activities prohibited in Islam.
Conclusion
In the dynamic cryptocurrency market, partnerships bring advantages but also pose challenges for Islamic investors adhering to Shariah principles. Collaborations between halal and haram cryptocurrencies risk compromising compliance due to potential indirect involvement in prohibited activities. While some partnerships may remain permissible if they involve general services that don't violate Shariah principles, Muslim investors must carefully evaluate each collaboration to ensure it aligns with Islamic law.