Halal & Haram Perspective of Cronos (CRO)
It is a blockchain which is compatible with the Ethereum Virtual Machine (EVM). It works as a decentralised and open source side chain with Crypto.com. It uses the native currency of Crypto.org i.e. CRO coin. It allows easy, rapid and low cost transferring of smart contracts and app from EVM-compatible chains and Ethereum. Cronos interoperates Cosnos eco system and Ethereum and it supports Defi, NFTs, and the metaverse.
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CRO is the native token of Cronos which Crypto.com Pay that is a service which gives its users cashback upon paying for services and products with CRO Token. This token was originally designed as a reward token ERC 20 on the Ethereum blockchain. However, it was later moved to Cronos, Crypto.com’s blockchain. The token is developed to make the transaction easier and less expensive. Acting as an intermediary currency, it helps the users to convert the digital currency into fiat counterparts.
Features of CRO:
The CRO Token and Cronos chain was designed keeping in mind a number of problems normally related to worldwide blockchain implementation. CRO Token possess the following features:
- Less Expensive and Lower Transaction fees: Scaling solutions was introduced for a faster payment network which increases with the transaction load. 50,000 transactions per second were planned to take place in the final form of Cronos chain. These are notably more transactions than Bitcoin’s blockchain.
- More Support for Merchants: The developers of the Crypto.com made the CRO blockchain integration easier for the merchants. A dedicated software development kit (SDK) was released by the company which didn’t require much technical prerequisite knowledge to integrate the CRO blockchain solutions.
- Decentralised Technology: In the domain of decentralised finance, CRO spreads confirmation across a network of computers for verifying transactions. Hacking and theft attempt becomes more difficult as compared to payments on central 3rd
Halal and Haram Perspective of CRO Token:
As cryptocurrency has become a buzzword, it has also attracted the Muslim investors due to its potential financial returns. Although the Muslim entrepreneurs has been attracted with the opportunity to raise funds by issuing tokens, the fear of it being Halal or Haram is still there. In case of CRO Token, to get the visa card we have to stake the coin. Below are the three types of Staking according to which we can cumulate whether it is Halal or Haram:
- Staking on the App:
In this CRO staking, if you want to be eligible for the VISA card reward other than the default 1% cashback offered, then you will have to stake your coin for 180 days. This is impermissible as there is no sign from Crypto.com that the staked CRO is used for securing the network/validating transactions. The question arises that if it’s not used for these things then how they are generating the rewards?
- Staking on the Exchange:
The staking on the exchange is done on separate custodial wallets where the staking period is also of 180 days. The exchange does not give you the eligibility for the VISA cards but discount is given Maker/Taker fees. However, this is also impermissible because there is no proof that whether the staked CRO is being used for network/validating transactions. If not, then how the reward is being generated?
- Staking on DeFi Wallet:
Crypto.com also offers a decentralised finance wallet which is permissible because the staked coin or token is used to secure the crypto.com chain.
Shariah Review about Cronos (CRO):
Mixed reviews has been reported regarding the Digital currency saying that this currency doesn’t meet the Shariah standards. Some of the following reviews will make it clear if CRO Token is according to the Shariah:
Mufti M. Abu-Bakar (former advisor to Blossom finance):
Mufti Abu Bakar argued that digital currency is Halal under Shariah law. He said that not only crypto but all the currencies have speculative element and this doesn’t regard crypto as Haram.
Indonesian Ullama Group:
An influential group of Indonesian Ullama’s declared crypto as Haram and prohibited for Muslims because according to them digital currency which is a new form of commodity is used for investment purposes.
Mohd Daud Bakr (chairman Shariah Advisory):
Daud said that a thorough study is needed to understand the monetary system in light of Islamic laws. Furthermore he added that a transaction that has elements of Riba, gambling and uncertainty is Haram from Shariah point of view. He also included that Shariah Council has identified Bitcoin, Ethereum and Ripple in compliance with Shariah while crypto is a commodity which can be used as a currency and medium for business transaction. Redeeming rewards for goods is also allowed by Shariah.
Crypto is in compliance with Shariah because it is an abstract tool that rewards points for buying or selling goods when the value of goods increases or decreases.