Is Tapswap Halal or Haram? An Islamic Perspective on Cryptocurrency Trading

Bismillah ar-Rahman ar-Raheem

Tapswap is a decentralized exchange (DEX) protocol built on the Polygon blockchain, allowing users to swap, lend, and borrow various cryptocurrencies and digital assets. This article explores the Islamic perspective on whether engaging with Tapswap is considered halal (permissible) or haram (impermissible).

From an Islamic Perspective

The key considerations in evaluating Tapswap from an Islamic standpoint are:

The nature of the underlying assets and tokens traded on Tapswap. The mechanics of how Tapswap functions. The intention and purpose of using Tapswap.

Nature of Underlying Assets and Tokens

One of the primary concerns is the nature of the assets and tokens traded on Tapswap. If any of these assets are inherently haram (prohibited) – such as those related to interest-bearing loans, gambling, or other prohibited activities – then using Tapswap to trade these assets would be impermissible. For instance, if a digital asset is linked to an activity that is strictly forbidden by Islamic law, engaging in its trading would be haram.

Mechanics of Tapswap

Another crucial factor is the mechanics of how Tapswap functions. For instance:

Does the exchange involve any element of riba (usurious interest)? Is there gharar (uncertainty) in the exchange? Are there any other prohibited practices involved?

If any of these prohibitions are present, the use of Tapswap would be considered haram. The principles of riba, which involve usurious interest, are strictly prohibited in Islamic finance. Similarly, uncertainty (gharar) and other forms of prohibited practices would render the use of Tapswap impermissible.

Intention and Purpose

Finally, the intention and purpose behind using Tapswap must be considered. If the intention is to engage in speculative trading or activities that are not aligned with the principles of Islamic finance, then it would be problematic. Speculative trading in cryptocurrencies, for example, could be seen as a form of gambling, which is also haram.

Potential Concerns with Tapswap

A few potential concerns with Tapswap include:

Some of the tokens and assets traded on the platform may be haram, particularly those linked to interest-bearing loans or gambling. The lending and borrowing features may involve elements of riba, which are strictly prohibited in Islam. The speculative nature of cryptocurrency trading could be seen as a form of gambling, which is also haram.

It is important to note that the Islamic rulings on cryptocurrencies and decentralized finance are still evolving, and there may be differing opinions among Islamic scholars. Therefore, it is advisable to conduct a thorough investigation and seek the guidance of trusted Islamic scholars before engaging with Tapswap or any other cryptocurrency platforms.

The preservation of one's faith and adherence to Islamic principles should be the primary concern. As the Prophet Muhammad (peace and blessings be upon him) said, “The best among you are those who have the knowledge of Allah and act upon it.”“

Allah knows best, and may He guide us all to the straight path.

The Cryptocurrency Dilemma - Abu Hakeem Bilal Davis

Islamic Ruling On Cryptocurrency

The Ruling on Bitcoins and Cryptocurrency – Shaykh Sulayman ar-Ruhayli – Masjid Daar us Sunnah

For a detailed understanding of the Islamic perspective on cryptocurrencies, refer to the works of respected Islamic scholars such as Shaykh Sulayman ar-Ruhayli, who has provided valuable insights into the ruling on Bitcoins and other forms of cryptocurrency at Masjid Daar us Sunnah.