At the time of writing, the cryptocurrency market has experienced a boom in the last six months, with an increasing breadth of people investing in digital assets, – including Muslims who follow Shariah principles for finance. The increase in investment by members of the Islamic faith in cryptocurrencies such as Bitcoin and Ethereum has given rise to the question of Zakat payments. Zakat is the third pillar of Islam which requires Muslims to make charitable payments if they have adequate means to do so.
The key questions to consider are whether Zakat is mandatory on crypto investments and how the amount of Zakat on cryptocurrencies should be calculated. This article aims to explore these points and provide a more assured approach on how to view cryptocurrency investments from an Islamic finance perspective.
For more information on how to approach cryptocurrency investments from an Islamic finance perspective, please contact:
Tej Patel, Partner
Jibran Ahmed, Executive Director
Mohsin Khan, Principal Consultant