Crypto screening is a process of evaluating the Shariah compliance of crypto-assets. This includes reviewing the legitimacy, project, financials, token, and staking of a crypto-asset to ensure it meets certain criteria set by Islamic scholars. It is important to screen crypto-assets before investing to ensure they are Shariah compliant.
The concept of Shariah-compliant crypto-assets is subjective, and opinions on their compliance vary widely. Currently, individuals are responsible for reviewing and evaluating the Shariah compliance of each crypto asset, which can be a time-consuming process.
If you’re concerned about whether the coins you want to buy follow Shariah laws, you can use these 5 questions to help you choose the right ones.
- Does the coin serve as a reliable store of value?
- Can the coin function effectively as a medium of exchange?
- Is there transparency regarding the available recourse options?
- Do the tokenomics of the coin avoid resembling a Ponzi scheme?
- Does the coin have an established or anticipated permissible real-world application?
Our list of coins is intended to be a helpful tool for further research and to identify projects that others have evaluated for Shariah compliance. To assist Muslim crypto investors, we have created a halal cryptocurrency dashboard that follows a set of guidelines to filter halal cryptocurrencies you can buy.
However, please note that we are not Islamic scholars, and the accuracy of the halal cryptocurrency list cannot be guaranteed. It is simply a resource to save time and effort in evaluating the Shariah compliance of various cryptocurrencies.
Here are some specific considerations to keep in mind when screening crypto-assets:
- Legitimacy screening: Verify that the crypto-asset is a genuine project and not a scam.
- Project screening: Evaluate the Shariah compliance of the project as a whole.
- Financials screening: If the crypto-asset is an equity-based token, ensure that it meets the financial criteria for Shariah compliance.
- Token screening: Understand the Shariah compliance of the token itself.
- Staking screening: Understand the Shariah compliance of the staking mechanism.
According to Islamic scholars, halal cryptocurrencies should meet the following criteria to be considered Shariah compliant:
- No significant income from interest on loans.
- No investment in companies or projects that profit from gambling, arms, and alcohol.
- No income from adult entertainment or other restricted industries.
- Prohibition of profit from excess debt (riba).
Please note that the classification of the halal cryptocurrencies listed on our guide is based on our own research and information gathered from various sources. These tokens have not been screened or verified by any Islamic scholar or mufti. It is important to exercise caution and conduct your own due diligence when evaluating the Shariah compliance of any token.
The classification of tokens may change frequently, and it is not possible for us to always stay up to date with these changes. We recommend using the criteria listed above to conduct your own research and verify the Shariah compliance of these tokens.
If you notice any discrepancies in our classification, please let us know. If you would like to request that a specific coin be screened, please submit your request through our Shariah compliant screening request form.
