The Permissibility of Investing in Gold, Silver, and Cryptocurrencies Through Apps: A Shariah Perspective #
Original Question: “May i know if i use the Revolut apps to invest in commodity such as Gold and Silver as well as the Crypto, is it permissible? Syukran”
It is generally permissible to engage in financial transactions that are based on real underlying assets, such as commodities, and that involve a reasonable degree of risk and reward.
However, buying gold or silver as an investment falls within the scope of bai’ al-sarf (trading in currencies). There are several conditions that must be observed for bai’ al-sarf because currencies are considered as ribawi items. We can derive these conditions from a hadith reported by Ubadah bin al-Samit (may Allah be pleased with him) that:
Rasulullah (peace be upon him) said: “Gold is to be paid for by gold, silver by silver, wheat by wheat, barley by barley, dates by dates, and salt by salt, like for like and equal for equal, payment being made hand to hand. If these classes differ, then sell as you wish if payment is made hand to hand.” (Sahih Muslim)
In other words, if we are purchasing gold or silver with Singapore dollars, the payment in Singapore dollars should be made on the spot (instalment payment is not permitted) and the gold or silver should be delivered/received immediately.
As for buying gold or silver as an investment via an online medium (such as Revolut), it is permissible if the conditions are met:
- The price must be paid or transferred to the seller’s account immediately.
- Following the transaction, the seller is obligated to immediately deliver the gold/silver to the buyer or the person they have authorised to receive it on their behalf. However, the seller (as a trustee) may retain the gold as long as:
- with the buyer’s agreement
- the status of the gold/silver belonging to the buyer remains
- the gold/silver is not used without the buyer’s permission
- the gold/silver’s amount/weight does not change (either increases or decreases)
- the buyer has the option to either take the gold/silver whenever they want or order the party that sold the gold/silver to sell their gold/silver on their behalf whenever they want
Whereas for cryptocurrencies, the permissibility of investing in them is a matter of debate among Shariah scholars. Some scholars view cryptocurrencies as being analogous to fiat money, which is not considered a permissible form of investment in Islam. Other scholars view cryptocurrencies as being more similar to commodities, and therefore potentially acceptable for investment depending the specific terms and conditions of the investment.
Based on these premises and after examining Revolut’s terms and conditions, using the Revolut app to buy gold or silver for investment is permissible as it meets the stipulated Shariah conditions. However, for buying cryptocurrency via Revolut for investment, we stand guided by majority of Islamic jurists and established Shariah council that, it is not permissible to invest in crypto-based commodity due to the following reasons:
- Excessive uncertainty (gharar fahish) due to market fluctuation and may lead to massive financial loss;
- High risk exposure which shall results to zero-sum game (maysir); and
- Unregulated market by the government authority.
Allah Almighty knows best.
