Toncoin (TON), powers The Open Network (TON) blockchain, initially developed by Telegram but now run by an independent community. Here, we analyze Toncoin’s compliance with Shariah principles, incorporating insights from scholars and experts on Islamic finance.

What Makes Toncoin Unique?

Toncoin is more than just a digital currency—it’s the core asset of a comprehensive blockchain ecosystem known as TON. Originally called the “Telegram Open Network,” TON aimed to bring blockchain and cryptocurrency to the masses with speed, scalability, and security. However, in 2020, Telegram had to withdraw from the project due to regulatory issues. Since then, the development of TON has been community-driven, creating a unique model where no single entity holds central control.

In practical terms, Toncoin fuels the TON blockchain. It powers transaction fees, staking (which helps secure the network), and serves as the primary currency within the TON ecosystem. This ecosystem is designed to host decentralized applications (dApps), smart contracts, and even decentralized finance (DeFi) services. These characteristics give Toncoin a clear functional value, beyond mere speculation, which is important from an Islamic perspective.

Islamic Guidelines for Determining Halal or Haram Investments

Islamic finance has strict guidelines for assessing whether an asset is halal. A permissible investment must:

  1. Avoid Riba (Interest): Assets must not generate interest-based income.
  2. Reduce Gharar (Excessive Uncertainty): Investments must avoid ambiguity and overly risky, speculative behavior.
  3. Stay Clear of Maysir (Gambling): Investments should not resemble gambling or luck-based practices.
  4. Align with Halal Industries: The project should not be associated with prohibited sectors, such as alcohol or gambling.

Let’s apply these principles to Toncoin.

Assessing Toncoin’s Shariah Compliance

1. Riba (Interest-Free Nature)

Toncoin does not have any interest-based mechanism, which is a major criterion in determining its permissibility. Its Proof-of-Stake (PoS) model allows users to earn staking rewards for validating transactions on the network, which some may view as income. However, scholars like Mufti Faraz Adam and Mufti Muhammad Abu-Bakar generally permit PoS staking because rewards are tied to one’s active participation in the network, not interest on a loan.

Staking, therefore, aligns with the work-and-reward model rather than interest-bearing profits, making it a permissible structure in Islamic finance. With Toncoin, staking is seen as compensation for contributing to the security of the network, rather than a guaranteed interest-bearing income.

2. Gharar (Avoidance of High Speculation)

One concern often raised with cryptocurrencies is their price volatility, which can imply gharar, or excessive uncertainty. However, scholars note that not all volatility makes an investment haram; rather, it is the level of speculation and the presence of real value that matters. For instance, Mufti Taqi Usmani has stated that assets with genuine utility are less prone to gharar concerns.

In the case of Toncoin, its value is closely tied to the TON blockchain’s functionalities, such as enabling transactions, supporting applications, and securing the network. This distinguishes it from cryptocurrencies that rely purely on speculation. By providing a clear use case and purpose within the TON ecosystem, Toncoin avoids excessive gharar. That said, while holding Toncoin for its utility is permissible, scholars caution against short-term trading solely for speculative gains, which could align with gharar or even maysir.

3. Avoiding Maysir (Gambling-Like Trading)

Maysir, or gambling, is an Islamic principle that forbids activities based on luck or extreme risk. Engaging in highly speculative or leveraged trading of Toncoin would likely resemble gambling and should be avoided. However, buying and holding Toncoin as a long-term investment, or using it for transaction fees within the ecosystem, steers clear of maysir.

Islamic scholars emphasize intention and purpose in investments. Using Toncoin with the intent to support its underlying technology, rather than engage in high-risk trading, aligns with ethical principles. Mufti Muhammad Abu-Bakar, a respected Islamic scholar, has highlighted that the purpose of investment can affect its permissibility, and long-term, purpose-driven investments are more favorable.

4. Compliance with Halal Industries

The TON blockchain and Toncoin have not been associated with industries or projects that violate Islamic principles, such as alcohol or gambling-related enterprises. The project’s focus on decentralization, transparency, and infrastructure for ethical applications aligns well with halal guidelines. Moreover, as an open-source network, TON has established a level of transparency that is highly valued in Islamic finance, ensuring that users can verify transactions and monitor its development. This emphasis on ethical use and clarity further supports its compliance with halal principles.

Expert Opinions on Toncoin’s Permissibility

While there is no single verdict from Islamic scholars specific to Toncoin, many scholars have discussed the criteria for cryptocurrencies in general. Scholars like Mufti Faraz Adam and Sheikh Joe Bradford have acknowledged that digital assets meeting certain ethical guidelines—like intrinsic value, transparency, and alignment with halal industries—can be permissible. These scholars advise Muslim investors to prioritize utility-based cryptocurrencies over purely speculative tokens. With Toncoin’s utility and decentralized governance, it generally fits within these guidelines, making it a potentially halal choice when used responsibly.

Additionally, Mufti Taqi Usmani, a leading scholar in Islamic finance, has often emphasized the need for ethical and purposeful investments in digital assets, with a focus on real-world utility rather than speculation. While his views were not specific to Toncoin, they echo principles that can apply to TON’s ecosystem and usage.

Conclusion: Is Buying & Selling Toncoin Halal?

Based on an in-depth review, Toncoin can be considered halal for investment, Insha Allah, particularly when used as a long-term asset. Here’s why:

  • No Interest (Riba-Free): Toncoin does not pay interest, and staking rewards are permissible as they result from active network contributions.
  • Functional Utility: Toncoin powers the TON blockchain ecosystem, supporting real-world applications and blockchain security.
  • Intention-Driven Usage: Investors should avoid speculative or short-term trading, which could align with gambling, and instead focus on Toncoin’s long-term value and practical uses within its ecosystem.

Investing in Toncoin with an intention to support its underlying technology and ecosystem, while avoiding speculative trading, is a balanced approach that aligns with Islamic values. As always, consulting a qualified scholar for personal guidance is recommended, as interpretations of Shariah can vary. Insha Allah, with thoughtful consideration, Toncoin offers a potentially permissible avenue for Muslim investors seeking Shariah-compliant digital assets.