Digital Gold through the Lens of Islam

The question of whether buying gold online is permissible has come up increasingly often as public interest in digital gold continues to grow. Through smartphone apps, gold can now be purchased in small amounts without visiting a physical store or holding the precious metal in hand.

This ease of access has attracted many people, particularly younger generations familiar with digital financial services. But behind all that convenience, what is the standing of digital gold from a Sharia perspective?

Fahmi Ali Hudaefi, SEI., MSh.Fin., a lecturer at the Faculty of Islamic Studies at Universitas Muhammadiyah Surakarta (UMS), explained that the ruling on digital gold cannot be simplified into a blanket halal or haram.

"Digital gold has to be assessed based on its transaction mechanism, the contract (akad) used, and the ownership structure in practice," said Ali, as he is commonly known, following an interview on Monday (20/4/2026).

In Islam, gold is classified as a ribawi commodity, meaning it is subject to specific rules in transactions. As such, the buying and selling of gold must meet certain conditions, including immediate mutual exchange (taqabudh), freedom from riba (interest), and the absence of gharar (uncertainty) and maisir (speculation).

Ali argued that digitalization does not automatically change these rulings. "The concern is not about its digital form, but whether the mechanism used still aligns with Sharia principles," he said.

He categorized digital gold practices into two types. The first is digital gold with real ownership, where every purchase is backed by physical gold as an underlying asset. 

Buyers have clear ownership rights and can mint or withdraw their gold at any time. If these conditions are met and the transaction is conducted in real time, the majority of contemporary scholars permit it.

The second is speculative digital gold, such as margin trading or CFD (Contract for Difference) gold, which carries no physical ownership. This practice is considered non-compliant with Sharia as it contains elements of speculation and does not satisfy the taqabudh principle.

Digital gold investment must also account for gold's status as a ribawi commodity. Ali explained that even in digital form, its nature remains that of gold as long as it represents actual physical gold.

"In Islamic legal maxims, the reference point is substance, not form. This means digitalization only changes the mode of ownership, not the nature of the commodity," Ali added. As a result, the rules governing gold exchange still apply, including the requirement for clear and interest-free transactions.

In practice, a number of Islamic financial institutions have offered digital gold products using compliant contracts. The most common is the jual beli (sale and purchase) contract. 

There is also the wadiah contract, a custodial arrangement where the platform holds the customer's gold, and the wakalah contract, where the platform acts as an agent to sell the user's gold on their behalf.

All three contracts are considered Sharia-compliant as long as their implementation is transparent. However, Ali stressed that derivative contracts such as CFDs remain problematic, as they only trade price differences without actual ownership.

The question of installment-based digital gold purchases has also drawn public interest. Ali said installments are permitted, but under strict conditions. 

The price must be agreed upon upfront and must not change throughout the installment period. No additional charges resembling interest may be applied for late payments.

Installment schemes can become non-compliant if the platform holds no physical gold, imposes time-based penalties, or bundles financing with hidden fees. "Installments are allowed, but not all digital gold installment products are automatically halal," he said.

The price of digital gold typically shows a spread, meaning the gap between the buying and selling price. This difference often raises questions about whether it constitutes a permissible profit.

"Let us first be clear on what a spread is. For example, if you buy gold on a platform at Rp1,050,000 per gram and the platform sells it at Rp1,000,000 per gram, the spread is Rp50,000. This difference is usually the platform's margin," Ali explained.

A spread is essentially halal as long as it meets Sharia principles. In a sale and purchase transaction, profit is permissible provided the transaction is conducted lawfully, transparently, and free of riba or speculation. The spread becomes problematic when it appears in derivative transactions that carry no actual gold ownership.

Ali reminded the public to understand how to verify Sharia compliance before investing in digital gold. Key indicators to look for include the presence of physical gold as an underlying asset, clear ownership that can be withdrawn at any time, and the existence of a direct or system-verified exchange process. 

Investors should also avoid features such as margin trading, leverage, or speculative trading, all of which tend to carry Sharia risk.

In Indonesia, digital gold practices are also guided by religious rulings. Non-cash gold transactions are governed by the Indonesian National Sharia Council (DSN-MUI) Fatwa Number 77/DSN-MUI/V/2010. The more recent Fatwa Number 166/DSN-MUI/II/2026 serves as a foundation for financial institutions offering digital gold products.

"The digital gold trend is rising sharply right now. That is exactly why this fatwa exists, to ensure that technological innovation continues to move in step with Sharia principles," Ali said.

Digital gold may offer a great deal of convenience, but Ali reminded the public that ease of access must be matched with understanding. Technology is free to advance, but caution remains essential so that investments are not only financially rewarding but also spiritually sound.

Writer: Genis Dwi Gustati

Translator: Farizal Luqman Majid

Editor: Al Habiib Josy Asheva