Leaders at the mosque have made the decision to accept the cryptocurrency as part of Muslim observance of Zakah, the annual donation made by all of that faith, requiring that adherents donate 2.5% of their current wealth.
The Hackney mosque hopes to raise at least GBP 10,000 in Ether donations over Ramadan. Erik Guney, the board of trustees’ chairman, said that he hopes that the project can bring attention to the Muslim world that the community needs support:
“I’ve grown up around here and I have watched the community grow and the challenges it’s faced with – it’s a struggle, with housing, food, the cost of funerals and government changes, he said, going on to point out that the wealthy can make a significant contribution.
“We are trying to appeal to a wider audience with the new money. It’s big in the Islamic world, and we have set up a platform for wealthier Muslims outside our community to support and donate to our mosque,” he added.
Founder of blockchain startup Combo Innovation Gurmit Singh has become the mosque’s crypto advisor, outlining how best the funds can be received, stored and sold.
Until recently, there had been concerns among Muslims whether the selling of cryptocurrency was permissible under Sharia Law and if it was possible for Islamic financial firms to invest in cryptocurrencies alongside the rest of the world. At a recent conference in Bahrain, leading Islamic scholars decided that Bitcoin and other digital currencies fell into the category of ribawa. This means that cryptocurrency must be exchanged in equal measure, and with immediate transfer of possession, to avoid breaking Sharia Law.
This argument is key to any decision that might be taken in the future regarding the permissibility of virtual currencies in the Muslim world, as the buying and selling of Bitcoin could be viewed as a type of usury due to its huge profit and loss margins.
It appears that this law is being observed by the mosque, as donations will be transferred straight from the mosque website to the bank’s cryptocurrency hard wallet, which will be visible for all to see. The donation will then be traded for sterling through a currency exchange like LocalBitcoins UK.
“If Muslims, who make up a quarter of the world’s population, hold just 1% of Bitcoins – or GBP 1.04bn – then GBP 26 million in Zakat contributions is due,” said Singh.
Zayd al Khair, a religious advisor at Masjid Ramadan, has been monitoring discussions and debates by Muslim scholars from all over the world:
“Bitcoin is a new phenomenon so scholars are divided,” he said. “Some have taken a practical approach and others have embraced it fully, and we have decided to take their position.”
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