Zakat on Cryptocurrency: What Muslim Investors Need to Know

As cryptocurrency has entered mainstream investing, Muslim crypto holders increasingly ask whether zakat is due on their digital assets. The scholarly consensus is developing, but a clear majority position has emerged.

Is Crypto Zakatable?

Yes, according to the majority of contemporary Islamic scholars who have studied the question, cryptocurrency that is held as an investment and meets the nisab threshold is subject to zakat. The key factors are that the asset has monetary value, is owned for a full lunar year, and exceeds the nisab.

Calculating Zakat on Crypto

The calculation is straightforward: take the market value of all your cryptocurrency holdings in your local currency on your annual zakat date. If this amount, combined with your other zakatable assets, exceeds the nisab, pay 2.5% of the total value.

What Counts as Ownership

Crypto held in self-custody wallets, centralized exchanges, and staking contracts is all zakatable. Crypto locked in DeFi liquidity pools is more complex, but many scholars treat the underlying value as zakatable.

Active Trading vs Holding

If you actively trade crypto as a business, the calculation follows commercial inventory rules. If you are a long-term holder, use the market value on your zakat date. Either way, the 2.5% rate applies.

Practical Advice

Use your crypto exchange's portfolio history or a portfolio tracker to get your holdings value on a consistent date each year. Calculate the fiat value, add to your other zakatable wealth, and pay 2.5% of the total if above nisab. Many Muslims time this with Ramadan for spiritual consistency.