Is Zakat Payable on Bitcoin?

Bitcoin coin


Is Zakat Payable on Bitcoin?

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

The Answer:

According to our understanding, Bitcoins are Zakatable. The value of Bitcoin should be converted into one’s local currency in which they will pay Zakat by.

The Fiqh (jurisprudence of the answer):

Bitcoins are Zakatable as they have Thamaniyyah and were created to serve as a peer-to-peer electronic cash system.  Thus, they resemble other currencies which possess Thamaniyyah and are Zakatable[1].

Is Bitcoin Māl and Does It Have Taqawwum?

The two components for something to be considered Māl are:

1)      Desirability
2)      Storability

In early March 2017, the value of one Bitcoin surpassed the value of a troy ounce of gold.  Bitcoin closed at $1,268 whilst the troy ounce of gold closed at $1,233[2].  The market cap of Bitcoin on 17th April was $19,756,107,949[3].  On 14th April, Blockchain recorded a transaction per day figure of 290,208[4].  These factors clearly show a supply and demand factor for Bitcoin.  Thus, the first component of desirability is established in Māl

In reality, Bitcoins are digits stored on a global, shared ledger which one can use with their private keys stored in their Bitcoin Wallet.  In other words, Bitcoins are just account balances stored in a large, shared, global ledger. If a person can connect to that ledger and prove ownership of their account, they can spend its balance, regardless of how one accesses that ledger, whether with a phone app, a computer program, or a browser.  The thing that proves that you own the account is the private key that is used to sign the transactions you make, and that is what is typically stored in bitcoin wallet apps[5].  A Bitcoin wallet is a software program where Bitcoins are stored. To be technically accurate, Bitcoins are not stored anywhere; there is a private key (secret number) for every Bitcoin address that is saved in the Bitcoin wallet of the person who owns the balance. Bitcoin wallets facilitate sending and receiving Bitcoins and give ownership of the Bitcoin balance to the user.  The Bitcoin wallet comes in many forms; desktop, mobile, web and hardware are the four main types of wallets[6].  Therefore, Bitcoins pass the criterion of storability in respect to being Māl as they are stored on the shared ledger. 

In respect to Taqawwum, the Aṣl and foundational premise is ‘Ibāḥah (lawfulness) in respect to items and transactions[7].  Considering that Bitcoins are merely digits, there is no evidence or matter which indicates to them being unlawful.  Hence, Bitcoins have Taqawwum.

Bitcoin fulfils the two criteria of desirability and storability.  Furthermore, it is Mutaqawwim.  Hence, Bitcoins are Māl and are Mutaqawwim

 Is Bitcoin money in Shariah?

Imam Ibn Taymiyyah (d. 728 H) states that benefit from the actual corpus of money is never the objective of money, rather, it is the exchange which is the objective and benefit of money [8].  This is true for Bitcoin.  Bitcoin in and of itself does not serve any purpose besides being a store of value and a medium of exchange.  People either buy bitcoin for savings or use Bitcoin to trade its value for another commodity.  Thus, the characteristics of money in Shariah discussed earlier all apply to Bitcoin, namely: 

1)      Benefit from money is derived by spending. It serves no other purpose whilst in your ownership[9]
2)      Money is used as a standard for pricing[10]
3)      Money is a medium of exchange to acquire assets with intrinsic value[11]

It is difficult to fit Bitcoin under the classical types of money.  Bitcoins are not Thaman Khilqī nor Thaman ‘Urfī, rather, they are a new breed of currencies which shares properties with Thaman Khilqī, commodity money, fiat currency and electronic money.  Bitcoins do not qualify as Thaman Khilqī as they do not possess intrinsic Thamaniyyah; Bitcoins are merely digits.  However, Bitcoins resemble one element of Thaman Khilqī.  Bitcoin was developed to serve as a medium of exchange[12] just as Thaman Khilqī was created to serve as a medium of exchange[13].  Bitcoin has been developed to serve as a peer-to-peer electronic cash system.  Bitcoin is not commodity money because Bitcoin does not have any intrinsic value, whereas, commodity money has intrinsic value and serves an alternative function besides being a medium of exchange.  Commodity money was initially assets (‘Urūḍ) which later gained prominence as money.  Conversely, Bitcoin cannot be considered ‘Urūḍ as ‘Urūḍ have intrinsic value and serve another purpose besides being a medium of exchange[14].  Thus, when the Fuqahā’ discuss Fulūs (copper and brass coins), they state how Fulūs could be sought for their ‘ayn (corpus) and ṣūrah (image).  However, Bitcoin does not have an ‘ayn and nor is it ever sought for its image and corpus.  Bitcoins are traded solely for their Māliyah and value, similar to Thaman Khilqī[15].  However, Bitcoins resemble commodity money (Thaman ‘Urfī or Thaman Iṣilāḥī) from the angle that the Thamaniyyah has come from the people[16]Thamaniyyah is not inherent in Bitcoin, rather, people have acknowledged Thamaniyyah in Bitcoin.   Bitcoins are not fiat currency as fiat currencies are part of a centralised system.  Furthermore, upon being withdrawn, fiat currencies serve as collectible items due to their coinage.   On the other hand, Bitcoins are part of a decentralised system.  Upon withdrawal or decline, will Bitcoin serve as a collectible or merely be strands of random digits?   Nonetheless, Bitcoin resembles fiat currencies from the aspect that in and of itself, it has no intrinsic value, rather, something extrinsic is giving it value.  In the case of fiat currencies, it is the government backing that is giving value, whereas, Bitcoin draws its value from the trust of people, supply and demand and from the overall concept of Bitcoin.  Bitcoin is not electronic money.  Electronic money is part of the centralised system and a digital representation of a fiat currency.  In addition, electronic money is held in banks and payment systems like PayPal and Mastercard.  From a jurisprudential aspect, electronic money is always in the ruling of a Qarḍ (loan) as it is stored in another organisation’s account.  Thus, the Financial Conduct Authority (FCA) describe electronic money as “stored monetary value, represented by a claim on the issuer”[17]. However, Bitcoin is not stored in another organisation’s account or system.  Bitcoin is stored on a ledger which is not owned by any system or organisation.  Therefore, Bitcoin is not in the ruling of Qar.  Consequently, Bitcoin and electronic money are different despite both being digital.

The differences between Bitcoin and other types of currencies mandate Bitcoin to qualify as a new type of currency according to Islamic economics.  Bitcoin functions like traditional currencies: it is recognised and has a value, it can be used to buy things, and its value can change according to market variables. Increased demand for Bitcoin over the last few years has seen an increase in its circulation and value.  In March 2014, PwC reported a total value of $8 billion and between 60,000 to 80,000 transactions daily[18].  More recently, reports over an average 200,000 transactions a day[19].  In the last 30 days or so of 2016, about $3 billion of Bitcoins were traded, which averages out to $100 million per day[20].   

Economists argue that Bitcoin falls short of being money as the extreme volatility compromises Bitcoin being a store of value and a unit of account.  However, traditional currencies in the past have also suffered extreme volatility.  For example, Zambian kwacha fell 42% against the U.S. dollar in 2015 as copper, which accounts for 70% of the African nation’s exports, dropped to a six-year low.  The Belarusian ruble experienced a 41.8% drop against the U.S. dollar in 2015, falling from 11,900 Belarusian rubles to the U.S. dollar on Jan. 1, 2015, to 18,569 on the same day in 2016.  The Argentine peso had suffered a 2015 drop of roughly 35% against the U.S. dollar as of Dec. 24.  Brazil struggled with headwinds including budget woes, concerns about China’s economy and high inflation. Amid these woes, the real dropped 33% against the U.S. dollar in 2015.  Mozambique, a nation in southern Africa, struggled to cope with the effects of a decline in exports of sugar, coal and cotton.  Economic growth in the nation suffered because of this drop-in shipments to other countries, and amid these difficulties, the metical fell 32% in 2015[21].  Therefore, volatility is not a strong argument to dismiss Bitcoin as a currency.  Volatility can be explained by the fact that Bitcoin is still in its infancy and people are speculating on its future.

For further reading on Bitcoin according to Islamic law and economics, see: 

And Allah Ta’ālā Alone Knows Best

Mufti Faraz Adam al-Mahmudi,


The views and opinions expressed in this answer belong only to the author and do not in any way represent or reflect the views of any institutions to which he may be affiliated.

Arguments and ideas propounded in this answer are based on the juristic interpretations and reasoning of the author. Given that contemporary issues and interpretations of contemporary issues are subjective in nature, another Mufti may reach different conclusions to the one expressed by the author. Whilst every effort has been taken to ensure total accuracy and soundness from a Shari’ah perspective, the author is open to any correction or juristic guidance. On the event of any juristic shortcomings, the author will retract any or all of the conclusions expressed within this answer.

The Shari’ah ruling given herein is based specifically on the scenario in question.  The author bears no responsibility towards any party that acts or does not act on this answer and is exempted from any and all forms of loss or damage.  This answer may not be used as evidence in any court of law without prior written consent from the author.  Consideration is only given and is restricted to the specific links provided, the author does not endorse nor approve of any other content the website may contain.

[1] (وَثَمَنِيَّةُ الْمَالِ كَالدَّرَاهِمِ وَالدَّنَانِيرِ) لِتَعَيُّنِهِمَا لِلتِّجَارَةِ بِأَصْلِ الْخِلْقَةِ فَتَلْزَمُ الزَّكَاةُ كَيْفَمَا أَمْسَكَهُمَا وَلَوْ لِلنَّفَقَةِ (حاشية ابن عابدين ج 2 ص 267 ط سعيد)

[2] BBC, ‘Bitcoin value tops gold for first time’ available at:





[7] وَاعْلَمْ أَنَّ الْأَصْلَ فِي الْأَشْيَاءِ كُلِّهَا سِوَى الْفُرُوجِ الْإِبَاحَةُ قَالَ اللَّهُ تَعَالَى {هُوَ الَّذِي خَلَقَ لَكُمْ مَا فِي الأَرْضِ جَمِيعًا} [البقرة: 29] وَقَالَ {كُلُوا مِمَّا فِي الأَرْضِ حَلالا طَيِّبًا} [البقرة: 168] وَإِنَّمَا تَثْبُتُ الْحُرْمَةُ بِعَارِضِ نَصٍّ مُطْلَقٍ أَوْ خَبَرٍ مَرْوِيٍّ فَمَا لَمْ يُوجَدْ شَيْءٌ مِنْ الدَّلَائِلِ الْمُحَرِّمَةِ فَهِيَ عَلَى الْإِبَاحَةِ (مجمع الأنهر ج 2 ص 568 ط دار إحياء التراث العربي)

لِأَنَّ الْأَصْلَ فِي الْبَيْعِ الْحِلُّ {وَأَحَلَّ اللَّهُ الْبَيْعَ} [البقرة: 275] وَإِنَّمَا الْحُرْمَةُ بِعَارِضِ (حاشية الشلبي على التبيين ج 4 ص 87 ط إمدادية)

[8]  فَإِنَّ الْمَقْصُودَ مِنْ الْأَثْمَانِ أَنْ تَكُونَ مِعْيَارًا لِلْأَمْوَالِ يَتَوَسَّلُ بِهَا إلَى مَعْرِفَةِ مَقَادِيرِ الْأَمْوَالِ وَلَا يَقْصِدُ الِانْتِفَاعَ بِعَيْنِهَا (مجموع الفتاوى ج 29 ص 472 ط مجمع الملك فهد)

[9]   وَقَوْلُهُ (كُلُّ مَا يُمْكِنُ الِانْتِفَاعُ بِهِ مَعَ بَقَاءِ أَصْلِهِ) احْتِرَازٌ عَنْ الدَّرَاهِمِ وَالدَّنَانِيرِ، فَإِنَّ الِانْتِفَاعَ الَّذِي خُلِقَتْ الدَّرَاهِمُ وَالدَّنَانِيرُ لِأَجْلِهِ وَهُوَ الثَّمَنِيَّةُ لَا يُمْكِنُ بِهِمَا مَعَ بَقَاءِ أَصْلِهِ فِي مِلْكِهِ. (العناية ج 6 ص 218 دار الفكر)

[10]  وقال الأترازي: المراد بالأثمان المطلقة الدراهم والدنانير؛ لأنهما أثمان بكل حال؛ لأن الله تعالى خلق الذهب والفضة ثمنا للأشياء، والمعنى بالثمينة كونه بحال يقدر به مالية الأشياء، ويتوصل به إليها ومما بهذه الصفة قبل الصياغة وبعدها(البناية ج 8 ص 15 ط دار الفكر)

[11] والمعنى بالثمينة كونه بحال يقدر به مالية الأشياء، ويتوصل به إليها ومما بهذه الصفة قبل الصياغة وبعدها،(البناية ج 8 ص 15 ط دار الفكر)

[12] Nakamoto, S., ‘Bitcoin: A Peer-to-Peer Electronic Cash System’.

[13]   وهذا لأن الدراهم والدنانير، أثمان من كل وجه، ولا مقصود في عينها إنما المقصود الثمنية (المحيط البرهاني)

[14]  حاصلُهُ أنّ الفلوسَ غير أثمانٍ خلقة، بل الأصلُ فيها أن تكون مثمّنة؛ لكونِها من النحاس، وهو غير ثمن، والثمنيّةُ فيها إنّما حصلت باصطلاح الناس، والعاقدان لم يصطلحا عليه، فتبطل ثمنيّتُها قصداً لتصحيحِ العقد، إذ لا وجه للتَّصحيح إلا أن تكون معيَّنةً خارجةً عن الثمنيّة، واصطلاحُ الغيرِ لا يكون حجَّة عليهما، إذ لا ولايةَ للغيرِ عليهما، فلهما نقضُ ذلك الاصطلاحِ باصطلاحٍ آخر، وإذا خرجت عن الثَّمنيَّةِ فعادت مثمّنة كما كانت، وتكون أعيانها مطلوبةً لا ماليّتها، فإنّ مالّيتها لا تكونُ إلا باعتبارِ الثمنيّة وهي زائلةٌ عنها باصطلاحهما، فيمكن أن يعطيَ فلسين، ويأخذَ فلساً واحداً طلباً لصورتِهِ لا باعتبارِ ماليّته. (عمدة الرعاية)

[15]   وَلَيْسَ فِي غَيْرِ الدَّرَاهِمِ وَالدَّنَانِيرِ مَقْصُودٌ، إنَّمَا الْمَقْصُودُ الْمَالِيَّةُ،، وَمَا وَرَاءَ ذَلِكَ هِيَ وَالْأَحْجَارُ سَوَاءٌ، (المبسوط للسرخسي ج 14 ص 16 ط المعرفة)

[16]   لِأَنَّ انْعِقَادَ هَذَا الْعَقْدِ لَمْ يَكُنْ بِاعْتِبَارِ مَالِيَّةٍ قَائِمَةٍ بِعَيْنِ الْفُلُوسِ، وَإِنَّمَا كَانَ بِاعْتِبَارِ مَالِيَّةٍ قَائِمَةٍ بِصِفَةِ الثَّمَنِيَّةِ فِيهَا (المبسوط للسرخسي ج 14 ص 29 ط المعرفة)


[18] PwC (2014), Virtual Currencies Out of the deep web, into the light.




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