Story By: Lee Bullen, Sub Editor: Michael Leidig, Agency:  Newsflash

The use of digital currencies such as Bitcoin are akin to gambling under sharia law and are therefore banned for Muslims.

The ruling was made in Iraq’s Kurdistan Region where the High Council of Fatwa has ruled that the use of cryptocurrencies is forbidden by Islamic law.

According to local media, people in Iraqi Kurdistan have been increasingly using cryptocurrencies in recent years.

The reason for the ban is because digital currencies do not have official government backing, and therefore to invest in them is akin to gambling, according to reports.

The High Council of Fatwa was quoted as saying: “Most of the time, paper currency is issued by authorised central banks, in contrast to the electronic currency. So there is no legal support.

“The price of these currencies rises and falls in a very short period of time and is affected by changes in the market.

“Due to the lack of a base and institution for valuation, exchange, monitoring and setting of prices, it is close to gambling and it has been forbidden in sharia.”

Analysts reportedly consider Bitcoin to be the main decentralised, open-source digital currency that is not owned by a company or government that is being traded in the region.

Other digital currencies have been created or are owned by private companies or governments, and are generally considered as no-value coins as they can drop to zero just by closing the business.