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Islamic perspective on cryptocurrency, by scholars

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President of University of Lagos Muslim Alumni (UMA), Alhaji Shuaib Afolabi Salis (sitting) receiving COVID-19 vaccine from the Special Adviser to the Governor of Ogun State on Health. Dr. Tayo Lawal in Abeokuta, Ogun.

In view of the recent controversies trailing the adoption of digital currency in Nigeria, the University of Lagos Muslim Alumni (UMA) has examined the Islamic perspectives, benefits and limitations to Muslims.

Stakeholders who gathered at the virtual webinar on the theme ‘Digital currency technology: Islamic perspective and emerging issues,’ agreed that the policy of Central Bank of Nigeria (CBN) banning cryptocurrency was not in the best interest of the citizens.

The chairman on the occasion, Dr Muiz Banire, commended the association for creating a platform where people could learn more about cryptocurrency.

He said: “The issue of cryptocurrency is controversial in the country in recent weeks. The CBN decided with their low wisdom to stop money deposits from the operators of crypto currency.

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“I was one of the first people to write against it. Though I don’t have confidence in it, the reality of the matter is that the basic knowledge I have on it does not call for absolute ban on the currency,” he said.

Banire added that CBN, in recent time, had assumed the role of dictatorship, more or less bulling all sectors of the economy, particularly the financial sector.

He said the lines of argument on crypto currency was the unknown identity of the operators which poses danger of the use for criminal purposes, which is an argument that is plausible.

“But,” he added, “the reality of the situation is that there are always better ways of addressing a default. Because several of the youths involved in crypto currency will end being unemployed, which will enhance social dislocation and insecurity.”

He said there were better ways to address such issues as done in the United States and the United Kingdom by regulating the process as advocated by the Vice President Prof. Yemi Oshibajo.

Managing Director, TrustBanc Arthur, Dr Bashir Oshodi, said Shariah scholars were yet to agree whether digital money was accepted.

“Most of the scholars said it is not allowed because it has not met the conditions. They argue that it has not protected wealth to a large extent while few scholars that accepted digital currency buttress their point that even the paper money was also rejected before it was accepted globally.”

Associate Director, EY, Akeem Ogunseni, defined digital currency as any form of currency that is not in its physical form and can be used as a medium of storage value or a medium of exchange.

He came with different perspectives and the idea behind cryptocurrency in terms of transaction was that any transaction made was publicly available for all participants in the network which was not done in conventional banking.

He added that crypto currency is strong, secure and reliable. “It has come to stay and it will continue to gain prominence from one country to another.’

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He encouraged those who want to participate in the ecosystem to create time to learn about it.

President of UNILAG Muslim Association (UMA), Dr Shuaib Salis, said there was a need to educate people on digital currency because not so many were familiar with it, including Muslims.

“We taught it fit to step in to provide a platform for enlightenment and education so that all of us will understand and get familiar with digital currency and also understand the perspectives of Islamic finance and begin to look forward to how the currency could be regulated because digital currency is here the same way other virtual communications app came and were accepted,” he said.

Chief Executive Officer, ‎Marble Capital Ltd, Akeem Oyewale, said the reason regulators were scared and banning outright digital currency was because they were afraid of loss of investments that citizens were exposed to.

He added that regulators were also afraid because cryptocurrency enhances money laundering, which could be used for terrorism financing and criminal activities.

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