Islamic finance basically applies a system that has been accepted by the Koran and is trusted in the Islamic religion. One that is applied in the Indonesian economic system is sharia law. This law is important because it aims to avoid usury and haram financial transactions that must be abandoned.
Forex trading turned out to be accepted in sharia law. The question is what are the conditions? Here’s the review!
Review of Islamic Finance and Sharia Law
One of the most widely used forex financial activities today is transacting with a sharia online forex trading account . The reason many have used a sharia-based trading account is because it has been accepted in Islamic finance and sharia law.
The main principles in Islamic finance and sharia law focus on equality and responsibility. The foundation of Islamic finance or sharia law basically has 4 basic principles, such as:
- There is a prohibition on receiving and paying in the form of usury
- Prohibition of gambling activities
- Exchanges that occur directly in the context of trading operations
- There are risks and benefits to be gained together
When the four conditions have been met, it is certain that the criteria are based on applicable law.
Forex Trading Regulations in Some Islamic Countries
Forex trading in several Islamic countries has been widely launched, one of which is proven by the use of sharia accounts which are allowed to transact forex in the desired platform.
Forex trading in Islamic countries is done by having a platform that is free of interest and creating a forex account from a Muslim forex account. The use of this forex account is considered good by some people because it has a lower business risk compared to ordinary trading.
Islamic countries have approved forex trading because as long as the conditions are not chancy and speculation, so long as the activity is lawful. If not, then it is included in the form of gambling. There are many Islamic countries that use forex trading that use a system like this like in Lebanon. Kuwait, Saudi Arabia and other countries.
Terms of Forex Trading in Indonesia
As the largest Islamic country in the world, Indonesia also opens forex trading in its territory. Forex or capital market growth is expected to grow as long as it follows several existing rules, such as those from the MUI or the Indonesian Ulema Council for sharia forex trading.
According to IDX Director Sulistyo Budi, the guidelines from the Indonesian Ulema Council can be used as a reference in order to participate in forex trading transactions in Indonesia. In addition, he also advised the public to be willing to follow sharia principles even though these stocks differ from one another.
Forex trading in Indonesia, especially in sharia forex trading, will enforce the issuance of sharia securities, which consists of 5 regulations which include:
1. Application of sharia principles in the capital market
2. Issuance of sharia shares
3. Issuance of Islamic bonds
4. Issuance of sharia mutual funds
5. Asset-backed securities.
These five conditions of sharia forex are expected to be easy to do and understand by people who want to transact using sharia forex trading. In addition, regulations regarding sharia forex are broken down so that existing regulations become more focused and can be applied easily.
Forex Regulatory System in Indonesia
Basically the forex regulation system in Indonesia is regulated by BAPPEBTI or the Commodity Futures Trading Regulatory Agency. Its job is to monitor trades that occur within a certain period of time and this agency is also tasked with overseeing all movements made by the brokerage company so that there are no negative problems when there is a large movement of money in it.
The function of forex regulation is to prevent fraud that can be done by brokers and to ensure good maintenance of brokers in terms of service levels, features, and facilities. The regulatory system supervised by BAPPEBTI is one of the things that is absolutely fulfilled in Indonesia, especially in sharia forex trading.
Basically, sharia online forex trading is accepted in sharia law and Islamic finance as long as the market follows the standards given by the MUI. This standard includes the application of capital sharia principles in the capital market and is supervised by BAPPEBTI.
The big question about whether sharia law and Islamic finance is accepted in Indonesia, then the answer is accepted as long as there is no chance in trading and there is speculation in it. So I hope this article helps!