MUHAMMADIYAH.OR.ID, YOGYAKARTA — The Council for Tarjih and Tajdid of the Central Board of Muhammadiyah (MTT PP Muhammadiyah) held an in-depth study session on developments in blockchain-based financial technology, cryptocurrency, and Bitcoin in Yogyakarta on Sunday (14/12).
The forum was part of Muhammadiyah’s ongoing effort to critically and academically engage with emerging technologies in ways that remain aligned with Islamic ethical and sharia principles.
The discussion was moderated by Mohammad Bekti Hendrie Anto, a member of the Majelis Tarjih and Tajdid, who emphasized in his opening remarks that discourse on blockchain and crypto is an inevitable reality of the times. He noted that a progressive religious stance is reflected in the willingness of Islamic organizations to understand new technologies clearly and proportionally.
“Blockchain and cryptocurrency are not merely passing trends. They are a historical inevitability. Muhammadiyah must be present to offer well-grounded perspectives—neither rushing to declare them forbidden nor uncritically endorsing them,” Bekti said.
He added that the Majelis Tarjih and Tajdid deliberately invited speakers with strong technical expertise who are also capable of analyzing these issues through the lenses of Islamic jurisprudence and legal ethics.
The speakers were Dr. Noor Akhmad Setiawan, an academic from the Department of Electrical Engineering and Information Technology at Universitas Gadjah Mada (UGM) and a member of the Advisory Board of the Indonesian Sharia Blockchain Association, and Mochammad Tanzil Multazam, a lecturer at Universitas Muhammadiyah Sidoarjo specializing in sharia and cyber law.
Blockchain as an Evolution of Record-Keeping Technology
In his presentation, Dr. Noor Akhmad Setiawan explained that blockchain is fundamentally an evolution of ledger technology designed to ensure honesty, transparency, and data integrity. He stressed that blockchain should not be equated solely with cryptocurrency.
“A common misconception is to view blockchain only as Bitcoin or as a payment tool. In fact, blockchain is a record-keeping technology that can be applied across many sectors: education, land certification, supply chains, government audits, and asset documentation,” he explained.
He described blockchain’s decentralized structure, in which data is not stored under a single authority but distributed and verified by multiple parties. Through cryptographic mechanisms and consensus systems, unilateral data manipulation becomes extremely difficult, costly, and easily detectable.
According to Noor Akhmad, this shift of trust from centralized institutions to transparent systems aligns with the objectives of maqashid al-sharia, particularly the protection of wealth (hifz al-mal), honesty, and justice.
“Blockchain itself is neutral. Whether it becomes beneficial or harmful depends on who uses it and for what purpose. Muhammadiyah should be a pioneer in utilizing blockchain for socially beneficial ends,” he asserted.
He also shared his involvement in developing blockchain systems for higher education, including academic records and diplomas, as well as projects for used-vehicle inspections that ensure the authenticity and traceability of asset histories.
Regarding Bitcoin, Noor Akhmad explained that it represents the first public implementation of blockchain in finance since 2009. However, he argued that Bitcoin is better understood today as a store of value rather than a daily medium of exchange.
“Technically, Bitcoin can function as a payment tool, but its volatility and limited transaction capacity make it more suitable as a store of value similar to digital gold,” he said.
He further compared Bitcoin with gold and fiat currencies, noting that Bitcoin’s price fluctuations are largely due to limited adoption and its relatively small market size compared to global gold markets.
Beyond Bitcoin, he discussed second-generation blockchains such as Ethereum, Cardano, and Solana, which enable smart contracts—self-executing agreements that operate without intermediaries and hold significant potential for sharia-compliant financial systems.
Bekti noted that these explanations help correct widespread public misunderstandings that have often shaped overly restrictive religious views on crypto and blockchain.
“If crypto is always imagined only as a payment instrument, the scope of religious reasoning becomes narrow. In reality, many tokens and platforms are better understood as digital commodities and technological infrastructure,” he remarked.
Legal Challenges of Crypto Assets as Digital Assets
In the following session, Mochammad Tanzil Multazam emphasized the importance of assessing crypto assets not merely through price volatility, but through their processes, real-world utility, and legal implications.
He elaborated on the distinction between private (permissioned) blockchains, commonly used by corporations, and public (permissionless) blockchains such as Bitcoin and Ethereum, which form the backbone of the global crypto ecosystem.
Tanzil outlined the evolution of blockchain from Bitcoin’s value-transfer system to Ethereum’s smart contract framework, as well as emerging scalability challenges that have given rise to alternative blockchains and the broader shift toward the Web3 era—where companies function as protocol developers rather than intermediaries.
In this context, he stressed that crypto assets should not be classified as money, but as digital assets, some of which represent ownership of tangible assets such as gold, stocks, bonds, and real estate through tokenization.
He provided examples ranging from tokenized equity to cross-border property investment, enabling fractional ownership and asset-based income. These systems rely heavily on transparency and traceable data, while also opening space for Decentralized Finance (DeFi), which operates without intermediaries and may be adapted to sharia principles.
On security, Tanzil clarified that mining and validation processes serve to verify data rather than “print money,” noting that the greatest risks often stem from users’ negligence in safeguarding private keys. He also welcomed regulatory oversight by Indonesia’s Financial Services Authority (OJK), while acknowledging enforcement challenges.
In closing, Tanzil encouraged participants to consider blockchain’s collective and productive potential. The study reaffirmed that discussions on crypto and blockchain cannot be reduced to simplistic halal–haram binaries, but must be approached with comprehensive, contextual, and proportionate understanding. (Bintang Adrian)
