Egypt’s top Muslim cleric on Monday called for a ban on bitcoin, saying the digital currency is “forbidden” by Islam.
Comparing the digital currency to gambling, which is banned in Islam, Shawki Allam issued a fatwa banning bitcoin “due to its direct responsibility in financial ruin for individuals,” according to Egypt’s Al-Ahram daily.
Speculators and investors have flocked to the digital currency in recent months as its price has skyrocketed.
Bitcoin’s value rose 25-fold over 2017 to a record high above $19,500 on December 18 before tumbling to just above $12,000 less than a week later.
It was sitting at $13,345 in Asia on Tuesday.
Noting that the cryptocurrency is unregulated, Allam said the “currency’s risk as well as its high profit potential undermines Egypt’s ability to maintain and stabilize its own currency.”
He also said the digital currency could have a “negative effect on its dealers’ legal safety, possibly due to failure to publicly disclose such operations.” He said this could lead to an “ease in money laundering and contrabands trade.”
Allam also said a cryptocurrency like bitcoin “impinges on the state’s authority in preserving currency exchange, as well as its necessary supervising measures on domestic and foreign financial activities.”
While bitcoin is legal in Egypt, the country’s Financial Regulatory Authority said last month that that cajoling people to use the currency is a “form of deception that falls under legal liability,” according to Al-Ahram.
AFP contributed to this report.