Owning Ether (ETH) is halal according to the most detailed published Shariah opinion on it, the August 2019 white paper by Amanie Advisors. That ruling has conditions. It treats ETH as a utility token that powers the Ethereum network, not as a currency. It does not cover tokens used to earn interest. Its authors said they would review proof-of-stake once it was complete. Other bodies disagree. Turkey's Diyanet and Egypt's Dar al-Ifta both warned against cryptocurrencies in 2017. No single fatwa binds all Muslims, so the answer for you depends on which scholars you follow and on how you use ETH.
The rulings on Ether, in date order
Amanie Advisors, August 2019: halal as a utility token
Amanie Advisors is a Shariah advisory firm whose chairman, Dr. Mohamed Ali Elgari, is a professor of Islamic Economics. Decrypt reported on 28 August 2019 that the firm had published a white paper earlier that month. The Islamic Law Blog summarised its position on 2 October 2019: the scholars and advisers behind it "assert that owning ETH is ḥalāl".
According to Decrypt, the reasoning and its limits were:
- Classification. Ether is mainly used to power the network, so the Shariah rules on currency exchange do not apply to it.
- Interest. Tokens used specifically to make profit from interest would not be compliant.
- Currency use. If Ethereum began to be used as a currency, Amanie would need to look at the question again.
- Consensus. Both proof-of-work and proof-of-stake could be compliant. The proof-of-stake design was to be reviewed once its development was finished.
- Status. The opinion is influential but not enforceable.
Ethereum moved to proof-of-stake on 15 September 2022, three years after the opinion was published.
Shariyah Review Bureau, Bahrain, 2019–2020: certification of specific products
The Shariyah Review Bureau (SRB), a Shariah advisory firm licensed by the Central Bank of Bahrain, issued certifications for specific products and businesses. These included a 2019 brokerage certification covering bitcoin, ether and litecoin. The certifications apply to those firms and products. They are not a general ruling on Ethereum.
Opposing and cautious views
- Turkey, November 2017. The Directorate of Religious Affairs (Diyanet) said cryptocurrencies were not appropriate for Muslims to use. Its reasons were speculation, the risk of money laundering, and the lack of state oversight. Several outlets reported the ruling as applying "at this time".
- Egypt, December 2017 / January 2018. Grand Mufti Shawki Allam declared Bitcoin trading unlawful under Islamic law. He cited the lack of central-bank backing and of set rules, and compared the trade to gambling. A fatwa is a non-binding legal opinion.
- Shaikh Haitham al-Haddad, 2017. He issued a fatwa on Bitcoin and other cryptocurrencies. Decrypt cited him as a sign that more conservative schools may not accept Amanie's view.
- Darul Ifta Birmingham (undated). It notes that contemporary scholars differ on cryptocurrency and advises that "the best and safest approach would be to refrain from it until further research is conducted." It cites Mufti Faraz Adam's paper Bitcoin: Shariah Compliant?, which tests Bitcoin against three conditions for money (mal, taqawwum, thamaniyyah) and finds that two are met.
The 2017 rulings were about Bitcoin and cryptocurrency in general. They came before the Amanie paper and do not deal with Ether's utility role specifically.
Why the "utility token" argument matters
The halal case for ETH rests on what Ether actually does on the network. Ethereum.org's developer documentation defines gas as "the unit that measures the amount of computational effort required to execute specific operations". Fees are paid in ETH. Each transaction pays a base fee, which is "burned", removing it from circulation, plus an optional priority fee that goes to the validator.
Because ETH is used up paying for computation, Amanie classed it as a utility token rather than money. That keeps it outside the stricter rules on currency exchange (sarf). The same reasoning sets a limit: Amanie said it would revisit the ruling if ETH came to be used mainly as a currency.
What can make Ethereum use impermissible
The rulings separate the asset from what you do with it. The core prohibitions in Islamic finance are riba (interest), gharar (excessive uncertainty) and maysir (gambling).
- Interest-bearing products. Amanie excluded tokens used to make profit from interest. A DeFi lending pool that pays a predetermined return on deposited ETH falls under this exclusion.
- Speculation. Diyanet and Dar al-Ifta both based their objections partly on speculation and on resemblance to gambling.
- Prohibited activities. The Amanie opinion assumes ETH is used for lawful purposes. Using ETH to fund prohibited businesses is a separate question, and no ruling on the token makes it acceptable.
- Token swaps and liquidity pools. Exchanging one permissible token for another is not covered by the 2019 opinion. Ask a scholar about the specific protocol, especially when the return comes from liquidity incentives.
Which ruling covers how you use ETH?
Answer up to three questions to see what the published opinions in this article say about your use of Ether.
What do you do, or plan to do, with your ETH?
- Only hold it → next question
- Stake it, solo or through liquid staking → No verified ruling on staking
- Lend it or deposit it for a return fixed in advance → Excluded by the Amanie opinion
- Swap tokens or provide liquidity on a decentralised exchange → Not covered by the 2019 opinion
Do you use ETH mainly as a currency for payments, or for its role paying for computation on the network?
- For its network role, or simply holding it → next question
- Mainly as a currency → Outside what Amanie addressed
Whose opinion do you follow?
- Scholars who accept the Amanie Advisors opinion → Covered by the Amanie opinion, with conditions
- Scholars who follow the cautious 2017 rulings, or I am not sure → Your scholars may not accept ETH
The August 2019 Amanie Advisors white paper says owning ETH is halal because it is a utility token that powers the network. It is influential but not enforceable, and it predates proof-of-stake. If you bought ETH to resell, NZF guidance says it is always zakatable on its market value on your zakat anniversary.
Turkey's Diyanet (November 2017) and Egypt's Dar al-Ifta (December 2017) warned against cryptocurrencies, citing speculation and resemblance to gambling, and Darul Ifta Birmingham advises refraining until further research. These rulings were about cryptocurrency in general, not Ether's utility role, so ask the scholar you follow.
Amanie said it would need to look at the question again if Ethereum began to be used as a currency, because the stricter rules on currency exchange (sarf) could then apply. No published update was found, so ask a scholar.
No ruling we could verify covers Ethereum staking directly. Amanie left proof-of-stake for later review, and the argument that rewards are payment for a service is not a published ruling. Liquid staking adds a second token and a third party. Ask a scholar about the exact method you will use.
Amanie said tokens used specifically to make profit from interest would not be compliant. A lending pool that pays a predetermined return on deposited ETH falls under this exclusion, because riba (interest) is a core prohibition.
Exchanging one token for another on a decentralised exchange is not covered by the Amanie opinion. Ask a scholar about the specific protocol, especially when the return comes from liquidity incentives.
This maps the published opinions summarised in the article onto your answers; it is not a fatwa or financial advice, does not calculate zakat, and cannot show whether any body has updated its view since proof-of-stake.
Is ETH staking halal?
None of the rulings above addresses Ethereum staking directly. Here is how staking works, according to ethereum.org:
- A solo validator needs at least 32 ETH and can hold up to 2,048 ETH.
- For solo stakers, "the protocol pays you directly", in return for proposing and attesting to blocks. Rewards include transaction fees that are not burned.
- Validators that go offline "lose small amounts of ETH". Provable misbehaviour, such as signing two conflicting blocks, results in slashing, which destroys part of the stake.
- With liquid staking, your staked ETH is represented by a token you can trade or use in DeFi. This adds counterparty and execution risk.
Amanie itself left proof-of-stake for later review. Liquid staking adds a second token and a third party. If you plan to stake, ask a scholar about the exact method you will use.
Zakat on ETH
The National Zakat Foundation (NZF) in the UK gives guidance approved by Mufti Amjad on 13 August 2023:
- "Any cryptocurrency or token purchased to resell will always be Zakatable."
- For tokens not bought to resell, "Zakat... will depend on the nature of the token and what it represents." Because Amanie classes ETH as a utility token, ask a scholar how this applies to ETH you hold long term.
- "Zakat is due on the market value on one's Zakat anniversary," converted into local currency when you calculate it.
NZF gives the nisab as 87.48 g of gold (another opinion uses 85 g) or 612.36 g of silver (another opinion uses 595 g). It describes zakat as "typically 2.5%". For people holding a mix of assets, NZF recommends the silver nisab as "safer and more beneficial for the recipients of Zakat."
Questions to settle before you decide
- Whose opinion do you follow? The Amanie paper and the 2017 warnings come to different conclusions. Neither is binding.
- Will you only hold ETH, or put it to work? Holding is what Amanie addressed. Lending, staking and liquidity provision each need their own answer.
- What does the protocol do with your ETH? Find out whether any return is fixed in advance, who the counterparty is, and where the yield comes from.
- When is your zakat anniversary? Value your holding at market price on that date.
The main Ether-specific ruling dates from 2019 and predates proof-of-stake, so anyone staking ETH today is relying on scholars' answers to a question that ruling left open. This article is general information, not religious, financial or investment advice.
