Islam holds social responsibility in high regard. As such, it is obligatory in Islam for the wealthy to give alms to the poor.
Zakat al-Fitr is one of the five pillars of Islam (the third pillar) and a practice of social justice. It is an annual process where the wealthy share 2.5% of their wealth with the poor and the needy.
Zakat is paid at the conclusion of the holy month of Ramadan, each lunar year. It is an obligatory donation by anyone who has more wealth than the minimum cut-off called Nisab. Nisab is calculated in terms of gold and silver and includes both movable and immovable assets. Though this cut-off value (threshold) varies for different types of wealth, the cut-off for personal wealth is always above the current value of 3 ounces of pure gold or 21 ounces of pure silver.
Zakat is calculated from the total wealth in possession for one lunar year. Various assets that are usually included while calculating Zakat are cash on hand or in bank accounts, refundable deposits, income through rents, tax refunds, gold, silver, precious metals, revenue from agricultural goods, stocks, bonds, crypto, the net value of a business, etc. Zakat is collected by Zakat collectors and distributed fairly to aid the poor, debtors, wayfarers, and people who are stricken by poverty and unable to fend for themselves.
Donating Crypto as Zakat
Zakat can be paid in fiat money or donated as goods to the poor, but it is becoming increasingly prevalent in the Muslim world to donate zakat in crypto.
The National Zakat Foundation in the UK has stated that Bitcoins are Zakatable. Anyone who owns Bitcoins above Nisab can pay 2.5% of their Bitcoin holdings in Bitcoin. It also states that any cryptocurrency or token purchased to resell is Zakatable. Furthermore, Shacklewell Lane Mosque in London has been accepting crypto for Zakat since 2018. The NZF designates crypto as Mal, something that is desirable and storable.
With the pandemic wreaking havoc in more than 200 countries, the state of poor, daily wage workers, and the like has become miserable. But the holy month’s arrival has given them a ray of hope as Zakat donations could alleviate their sufferings. From an economic perspective, many economists believe that Zakat will add liquidity to the economy and relieve the burden caused by the pandemic since almost 85% of total Zakat is collected during Ramadan.
However, with lockdowns imposed in several countries, it has become a challenge for people to organize, coordinate, and distribute Zakat collections in fiat – another reason why people are going cashless and opting to donate zakat in crypto. Besides, facing economic impediments, opting to go the crypto way is objective and reasonable.
Crypto, being a borderless electronic currency, can be easily and swiftly sent to Zakat collectors. Therefore, it enables unobstructed cross-country donations even during the lockdown. Religion and spiritual beliefs have always adapted to developments in science and technology and this is evident from the fact that many of the Zakat collectors have already begun accepting crypto.
So, while providing alms to those in need, make your Zakat donations in Bitcoin, Beldex, and other cryptos. The Shariah-compliance of Beldex makes it the perfect coin for Zakat. Let us combine the values of both religion and a crypto-based economy. Spread joy and happiness! Ramadan Kareem!
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