An Analysis of Bitcoin Zakat Calculation

Abstract

Nowadays, the use of digital currency technology is recognised by a variety of industries, particularly those that use Bitcoin transactions. Bitcoin was created as a digital currency to facilitate online payment transactions between one party or individual and another without the use of a third party. However, Bitcoin is also used for money laundering, investment scheme fraud, and involvement in cybercrime, funding activities, and other illegal activities. Bitcoin is also unsuitable as a value storage tool because Bitcoin wallet virtual securities are frequently targeted by cyber criminals, and they can lose liquidity and become vulnerable to hyperinflation. This scenario compels experts and scientists from all over the world to pay close attention to hakam law and the risks of Bitcoin use. According to the Fatwa issued by the state of Perlis explains that any ownership of digital assets is subject to zakat if it is sufficient haul (storage period) and nisab (mandatory rate). This is because digital currency is property and currency that is mutaqawwim which is legal property according to sharia. The issue is whether zakat institutions are willing to accept zakat via Bitcoin transactions. How to make zakat payments with Bitcoin. This study’s objective is to dismantle the method for calculating zakat on Bitcoin currency. This study collects data qualitatively through interviews with representatives of zakat institutions and Bitcoin practitioners. While data analysis is based on document analysis and data interpretation of information obtained through interviews. The findings of this study are calculation methods that can be applied to zakat Bitcoin currency. Thus, this study is able to provide new contributions to the academic development and management of zakat in the initial preparation and organise strategies for technological change and innovation that is growing rapidly in changing the way zakat collection today.