Connect with us

Bitcoin

Islam Forbids Bitcoin According to Egyptian Cleric

Published

on

islam forbids bitcoin

Bitcoin adoption in Egypt has received yet another setback following a Fatwa (Islamic ruling) from the Dar Al Iftaa that classifies the digital currency as forbidden by Islam. The ruling states the cryptocurrency has the potential to disrupt the current financial systems and poses risks to the country’s socio-economic order. The ruling mirrors previous statements made by the Central Bank of Egypt in 2017, which does not recognise bitcoin as a legal tender.

Bitcoin is Forbidden Under Islamic Law

The Counsellor of the Republican’s Mufti, Dr. Magdy Ashour issued the ruling on Dec 31st, 2017, stating the cryptocurrency should not be used for financial transactions since it is not guaranteed by the Central Bank of Egypt.

Speaking to Egypt Today, he pointed out that bitcoin could be used as a conduit for terrorist financing and is forbidden in Islamic Sharia due to its perceived risks.

“This currency is used directly to fund terrorists […] It has no set rules, which is considered as a contract annulment in Islam, that is why it is forbidden.”

Bitcoin is the world’s first decentralised cryptocurrency that runs on a distributed ledger technology known as the blockchain. The digital currency has courted controversy over its legitimacy ever since it became popular in Egypt last year. Market regulators have voiced concerns about the lack of a centralised authority over the cryptocurrency, which makes it difficult to control or monitor transactions.

The same reasoning was used by Egypt’s Grand Mufti, Shawki Allam, who confirmed on Monday that the purchase, sale or trading of cryptocurrencies would not be permitted as it could lead to fraud or trumping up of their values. He stated that bitcoin is not backed by any underlying asset, and can be issued and used without relying on any governing authority, adding it operates on a peer-to-peer network and is thus is devoid of any intermediaries or financial institutions.

The Potential Risks Outweigh the Gains

The ruling comes at a time when bitcoin mining and speculation in Egypt is booming. Miners are taking advantage of the cheap power available locally while traders are cashing on the digital currency’s volatility. The bitcoin unfriendly environment has created an underground cryptocurrency economy where Egyptians from all walks of life are obtaining and using bitcoin.

Interestingly, bitcoin offers Egypt’s unbanked population who make up most of its 93 million citizens an opportunity at financial inclusivity. Also, lack of electronic banking regulations covering bitcoin means local retailers cannot accept the digital currency for payments and thus hampering business growth and innovation. That being said, the Dar Al Iftaa believes the dangers pertaining to bitcoin mainstream use cannot be ignored. The Egyptian government has in recent times clamped down on extremist resources and is worried cryptocurrencies could be used as a terrorist financing tool.

In addition, bitcoin’s pseudo-anonymity can expose the authorities to cases of tax evasion or online fraud as its difficult to determine the identity of transacting parties. However, Egyptian policymakers are also concerned about bitcoin-fiat trading, which could weaken the country’s ability to preserve its national currency and even affect fiscal revenue targets.

Currently, many African governments are mulling over how to classify and regulate bitcoin as bitcoin’s value continues to witness astronomical highs. Mufti Allam concedes that an in-depth study of bitcoin and other cryptocurrencies is needed to better supervise its use. Until then, bitcoin is forbidden by Islamic Sharia in his eyes, which means more uncertainty for cryptocurrency holders in Egypt.

Bitcoin

South African Online Payments Processor PayFast Drops Bitcoin

Published

on

PayFast Drops Bitcoin

South African online payment gateway PayFast will cease supporting bitcoin payments from July 20, 2019, due to high transaction fees and long confirmation times. The company expressed its frustrations through an announcement on its website.

Bitcoin’s Current Limitations

PayFastAlthough digital currency is meant to make online transactions cheaper, faster, and convenient, PayFast observed that bitcoin’s current limitations have made it difficult for the company to offer it as an alternative to traditional payment methods.

“Unfortunately, there are a number of limitations and design flaws unique to Bitcoin that make it an impractical substitute for cash, including high transaction fees and long confirmation times for buyers. We have tried various ways to mitigate these problems, but unfortunately, these issues are fundamental. The resultant poor user experience has led us to re-evaluate Bitcoin as a payment method on our platform and a decision has been taken to discontinue support for Bitcoin from midnight 20 July 2019,” PayFast explained.

The PayFast platform has a ten-minute window for the confirmation of bitcoin payments. However, the Bitcoin network has failed, in most cases, to confirm payments within this time period resulting in unsuccessful transactions. The Bitcoin network can currently not handle the volume of transactions it gets at a faster speed, PayFast noted.

Luno has been enabling bitcoin payments on the PayFast platform by acting as an intermediary. “To eliminate any risk posed by bitcoin’s price volatility, Luno locked the bitcoin to ZAR exchange rate for a ten-minute window. If the transaction was not sufficiently confirmed within ten minutes, the payment was unsuccessful and a refund would be due,” PayFast said.

The Bitcoin network can only handle seven transactions per second compared to VISA’s 24,000. This limits bitcoin’s usefulness as a means of exchange and an asset. Moreover, users making payments using bitcoin risk incurring non-refundable processing fees when the transaction fails.

Despite these challenges, the Lightning Network promises to improve bitcoin transactions by making them instant, low-cost, scalable, and acceptable across different platforms.

PayFast Remains Open to Cryptocurrency

PayFast hopes that as this space continues to grow, cryptocurrencies will be able to handle faster payments.

“We are eagerly following the developments of cryptocurrencies and the supporting technologies that are aiming to enable faster payments. As soon as these become workable alternatives, we look forward to supporting cryptocurrencies as a payment method in the future,” the South African company stated. 

Continue Reading

Bitcoin

Is Egypt Finally Warming Up to Bitcoin?

Published

on

Egypt Warming Up to Bitcoin

A new banking law has given the Central Bank of Egypt (CBE) the right to ban the establishment, promotion or operation of platforms issuing or trading cryptocurrencies without acquiring the required licenses. However, this move suggests that the country is softening its stance on bitcoin as it enables crypto startups to operate under an official license.

The New Banking Law

Best Cryptocurrency to Invest inAccording to an unnamed official source that spoke to MENA news agency, CBE’s Board of Directors has the right to regulate cryptocurrencies and demand for multiple licenses under the new draft bill. The draft bill acknowledges the importance of financial technology, keeping pace with global banking changes, and leveraging modern technology to provide financial and banking services.

“The new law provides legal authority for the electronic authentication of bank transactions, electronic payment orders, and transfer orders as well as for the electronic settlement of checks and the issuance and circulation of electronic checks and electronic discount orders provided that Board of Directors of CBE issue rules and procedures regulating all the aforementioned actions,” the source said.

Furthermore, these electronic means will have the same authenticity as original papers as long as they meet the set technical criteria, the source stated.

The new draft bill is not yet available for public reading.

Is Egypt Warming Up to Crypto?

In 2018, Egypt’s Grand Mufti Shawki Allam banned cryptocurrencies based on Islamic law that declared these currencies as potential threats to the current financial system and risky due to scams and extreme price fluctuations. Moreover, he disregarded cryptocurrencies, such as bitcoin, because they can be issued and used without the control of any governing authority.

The new law could be a sign that the country is warming up to cryptocurrencies as crypto firms continue to penetrate the North African market and as the CBE considers issuing a digital currency.

How easy or difficult it will be for crypto startups to register for licenses remains to be seen. However, it does signal a willingness by Egyptian authorities to talk with the industry as opposed to outright ban it as has been the case previously.

Continue Reading

Bitcoin

Crypto.com Introduces Crypto Earn and Crypto Credit

Published

on

Crypto.com

Cryptocurrency platform Crypto.com has introduced Crypto Earn and Crypto Credit to enable users to earn interest on their coins and borrow by using digital currency as collateral.

Crypto Earn And Crypto Credit

Crypto Earn is a financial product that allows users to earn as much as eight percent per annum in interest on their cryptoasset holdings.

Crypto.comTo do this, users deposit digital assets into Crypto Earn through the Crypto.com app and then begin accumulating interest each day through their preferred cryptocurrency. To get started with Crypto Earn, users will have bitcoin, Paxos, and TrueUSD to choose from, according to a company press release.

Crypto.com is offering users two fixed periods namely one-month and three-month terms to earn interest on digital assets. The company will soon provide users with a flexible holding term. With Crypto Earn, you can also withdraw and deposit coins at no fees and spend what you earn.

Crypto Credit gives users instant loans with bitcoin as collateral. Users are free from fixed repayment schedules, monthly fees, payment deadlines, and late fees which financial institutions such as banks often impose. Users, therefore, enjoy a flexible repayment schedule in the twelve months from the beginning of the credit term.

Furthermore, users owning MCO tokens staked in the app receive a special rate of eight percent per annum. Users can use their loans to buy more cryptocurrencies on the app or they can spend it on the MCO Visa Card with cash back of up to five percent.

Other benefits of using Crypto Credit are that you do not require credit checks and that you can get the credit limit you want.

“Crypto Earn offers the most attractive interest rates in the market today. With the MCO Visa Card and Crypto Credit, we are uniquely positioned to do it while maintaining sustainable unit economics. MCO Visa Card, Crypto Earn, and Crypto Credit together form a powerful product suite that nobody else in the industry has today. We have never been more excited about the potential of our platform and look forward to continue scaling it globally later this year,” said Kris Marszalek, co-founder and CEO of Crypto.com.

Continue Reading

Popular Posts