Title: Imposing zakat on cryptocurrency (Bitcoin): a Shariah appraisal

Authors: Muhammad Ikhlas Rosele; Abdul Muneem; Azizi Bin Che Seman; Luqman Haji Abdullah; Noor Naemah Abdul Rahman; Mohd Edil Abd Sukor; Abdul Karim Ali

Addresses: Department of Fiqh and Usul, Academy of Islamic Studies, University of Malaya, Kuala Lumpur, 50603, Malaysia ' Department of Fiqh and Usul, Academy of Islamic Studies, University of Malaya, Kuala Lumpur, 50603, Malaysia ' Department of Shariah and Economics, Academy of Islamic Studies, University of Malaya, Kuala Lumpur, 50603, Malaysia ' Department of Fiqh and Usul, Academy of Islamic Studies, University of Malaya, Kuala Lumpur, 50603, Malaysia ' Department of Fiqh and Usul, Academy of Islamic Studies, University of Malaya, Kuala Lumpur, 50603, Malaysia ' Department of Finance, Faculty of Business and Economics, University of Malaya, Kuala Lumpur, 50603, Malaysia ' Department of Fiqh and Usul, Academy of Islamic Studies, University of Malaya, Kuala Lumpur, 50603, Malaysia

Abstract: This research aims to study whether zakat is due on cryptocurrency (Bitcoin) and to address the issues related to imposing zakat upon it. This study is conducted based on the qualitative research method following the inductive method and explanatory research approach. The findings show that Bitcoin is recognised as a digital asset in many countries and the tax is imposed accordingly. As such, Bitcoin is among the zakatable assets since it meets the conditions of zakat on assets. Moreover, Bitcoin as a digital currency would also be zakatable if a country recognises it as currency, as would any regulated digital currency issued by a government. Imposing zakat on Bitcoin would boost the total amount of zakat collectible, which would be beneficial for needy people. Further research is recommended to provide the zakat model for Bitcoin and other cryptocurrencies.

Keywords: cryptocurrency; Bitcoin; digital asset; zakat; Shariah.

DOI: 10.1504/GBER.2023.127550

Global Business and Economics Review, 2023 Vol.28 No.1, pp.91 - 111

Received: 29 Sep 2021
Accepted: 02 Feb 2022
Published online: 08 Dec 2022 *