Are NFTs Halal? The Shariah Debate Over Digital Ownership

In 2021, a digital collage titled Everydays: The First 5000 Days by artist Beeple sold for an astonishing $69 million at a Christie’s auction. Overnight, the term NFT — Non-Fungible Token — entered the global financial lexicon. Since then, NFTs have expanded beyond art into gaming, real estate, fashion, and entertainment.

But among the world’s 1.9 billion Muslims, this digital phenomenon has raised an important question: Are NFTs halal?

As the boundaries between faith, finance, and technology blur, Islamic scholars and investors are confronting one of the most complex debates in modern finance — whether blockchain-based ownership can coexist with Shariah principles that forbid speculation, uncertainty, and unethical content.

Understanding NFTs: Digital Ownership on the Blockchain

An NFT is a unique digital certificate stored on a blockchain — a decentralized ledger that records transactions transparently and permanently. Each NFT represents ownership of a specific asset, whether digital or physical.

Unlike cryptocurrencies such as Bitcoin or Ethereum, which are fungible (each coin has the same value), NFTs are non-fungible — each token is distinct and cannot be exchanged on a one-to-one basis.

Originally, NFTs were primarily associated with digital art. Today, their uses extend across multiple sectors:

• Art and collectibles – ownership of digital paintings or music rights.

• Gaming – tradeable in-game items or characters.

• Real estate – tokenized ownership deeds and property records.

• Luxury goods – authentication certificates for watches or fashion items.

• Finance and identity – blockchain-verified credentials or investment rights.

Global NFT trading volume peaked at around US$25 billion in 2022, driven largely by platforms such as OpenSea, Rarible, Magic Eden, and Blur. Although the market has since cooled, institutional players — including Sotheby’s, Nike, and Visa — continue to experiment with NFT technology.

The Shariah Framework: What Determines “Halal”

In Islamic finance, a financial product is only permissible if it meets Shariah standards that prohibit:

• Riba (interest) – any fixed or guaranteed return.

• Maysir (gambling) – profit based purely on chance or speculation.

• Gharar (excessive uncertainty) – unclear or ambiguous contracts.

• Haram use – involvement in prohibited industries or content.

Accordingly, the halal or haram status of NFTs depends on what the token represents, how it is traded, and its underlying purpose.

When NFTs Can Be Considered Halal

1. Clear and Halal Underlying Assets

If the NFT represents ownership of a halal and identifiable asset, such as a piece of Islamic art, a digital educational product, or a real estate share, it can be considered permissible.

NFTs in this category act as digital proof of ownership — conceptually similar to traditional property certificates (qabd in fiqh terms). Provided the underlying content is lawful and ownership rights are transparent, scholars argue that NFTs are merely a technological tool for managing halal assets.

2. Transparency and Legal Certainty

Islamic law emphasizes clarity in contractual terms. NFTs recorded on blockchain networks can enhance transparency by permanently documenting ownership history, price, and conditions of sale.

When used responsibly, smart contracts — self-executing code embedded in NFTs — can ensure that creators automatically receive royalties and that transactions remain auditable, reducing gharar (uncertainty).

3. Ethical and Social Utility

NFTs that serve socially beneficial or charitable purposes may align with Islamic ethical principles (Maqasid al-Shariah). For instance, NFTs have been issued to raise funds for humanitarian causes or to verify halal certification.

A notable case is Marhaba DeFi’s Souq NFT, a marketplace where every digital asset undergoes Shariah screening to ensure it does not breach Islamic values.

When NFTs Become Haram

1. Speculative Trading and Maysir

The majority of NFT transactions today are driven by price speculation rather than genuine ownership interest. Tokens are bought with the expectation that their market value will rise — a practice that closely resembles maysir (gambling).

When NFT prices fluctuate dramatically due to hype rather than intrinsic value, the trade loses its legitimacy under Islamic law. Scholars caution that participating in such markets risks normalizing gambling-like behavior.

2. Unclear Ownership or Gharar

NFT ownership does not always include rights to the underlying content. Buying an NFT linked to a digital artwork, for example, often grants ownership of the token, not the copyright. This lack of clarity creates gharar fahish — major contractual ambiguity — rendering the transaction impermissible.

3. Haram Content and Activities

NFTs that involve or depict prohibited activities — such as alcohol, gambling, adult content, or unethical products — are inherently haram. Trading such assets violates the moral objectives of Shariah regardless of the technology involved.

The Scholarly Debate: Divided but Evolving

Because NFTs are new, few formal fatwas (religious rulings) exist. Nonetheless, several respected Islamic finance scholars have expressed preliminary views.

• Mufti Faraz Adam, founder of Amanah Advisors, has said that NFTs are technologically neutral. “If they represent something halal and their purpose is transparent, NFTs can be permissible. But if speculation dominates, they fall into the prohibited zone,” he told Islamic Finance News.

• Dr Ziyaad Mahomed, Associate Dean at INCEIF (Malaysia), echoes this view, calling NFTs a “potentially transformative tool” for intellectual property protection — provided they are backed by real value.

• Mufti Taqi Usmani, one of the world’s leading Shariah authorities, has not issued a ruling specifically on NFTs but has repeatedly cautioned against cryptocurrency speculation, suggesting that many digital assets remain problematic until better regulated.

• The Indonesian Ulema Council (MUI), the country’s highest Islamic authority, has urged restraint, describing speculative NFT trading as too close to gambling.

In short, scholars agree that NFTs themselves are not haram, but most NFT trading activity as it exists today likely violates Shariah principles due to speculation and uncertainty.

NFT Marketplaces and Emerging Trends

The NFT landscape is dominated by large platforms such as:

• OpenSea – handling the majority of NFT trading volume; known for its wide range of art, collectibles, and domain names.

• Rarible – a decentralized marketplace allowing creators to mint tokens without intermediaries.

• Blur – popular among professional NFT traders seeking price aggregation and analytics.

• Magic Eden – focused on gaming and Solana-based projects.

• Binance NFT and OKX NFT – extensions of major crypto exchanges providing regulated NFT services.

However, most of these platforms operate outside Shariah frameworks. They often feature content or trading mechanisms that conflict with Islamic ethics — from speculative flipping to adult art collections.

A small number of projects are attempting to change this. HalalVerse, for instance, curates Islamic calligraphy and donates part of proceeds to waqf (charitable endowments). Others, like SUKUKChain, are developing tokenized Islamic bonds using NFT-like certificates for transparent ownership tracking.

These developments indicate that while the mainstream NFT market may be incompatible with Shariah principles today, a halal-compliant NFT ecosystem is slowly emerging.

Related:  Is the NFT Market Dead?

Regulatory Uncertainty

Islamic financial regulators have yet to issue concrete guidelines on NFTs. Institutions such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB) are still studying blockchain’s implications.

Meanwhile, Muslim-majority countries are experimenting cautiously:

• Dubai established the Virtual Assets Regulatory Authority (VARA) to oversee digital assets, including NFTs.

• Malaysia’s Securities Commission is exploring blockchain applications for halal certification and asset tokenization.

• Indonesia remains a global NFT hub, though its religious authorities continue to warn against speculative trading.

Analysts suggest that once Shariah standards for digital ownership are defined, NFTs could play a legitimate role in Islamic wealth management, cultural preservation, and ethical investment.

The Verdict: Conditionally Permissible

The general scholarly consensus can be summarized as conditional permissibility.

NFTs are halal when:

• The underlying asset is halal, identifiable, and valuable.

• Ownership rights are clear and enforceable.

• The transaction avoids interest, speculation, and gambling.

• The purpose serves an ethical or beneficial aim.

NFTs are haram when:

• They involve prohibited content or industries.

• They are traded purely for speculation.

• They lack transparency or involve deceptive marketing.

In the words of Mufti Faraz Adam:

“NFTs are tools — neither halal nor haram by nature. Their ruling depends entirely on the conduct surrounding them.”

The debate around NFTs reflects a broader question: how can Islamic finance adapt to digital transformation without compromising its ethical foundations?

As blockchain matures, tokenization could offer Muslim investors new ways to own, trade, and verify halal assets with unprecedented transparency. But without robust Shariah governance, NFTs risk becoming another speculative bubble detached from real economic value.

For now, most scholars recommend prudence rather than prohibition — encouraging innovation while urging Muslim investors to seek scholarly guidance before entering NFT markets.

If future NFT platforms prioritize real-world value, transparency, and ethical intent, they may yet find a place within the trillion-dollar halal economy.

Because in Islamic finance, as in technology, not every token that glitters is gold — or halal.