An Examination of the Jurisprudential and Legal Foundations for the Legitimacy of Digital Currencies in the Iranian Legal System

Abstract

The rapid expansion of digital currencies has created significant jurisprudential and legal challenges concerning their nature, legitimacy, ownership, and transactional validity. In the Iranian legal system, these challenges are particularly important because the legal status of emerging financial technologies must be assessed simultaneously within the framework of Islamic jurisprudence and positive law. This study examines the jurisprudential and legal foundations supporting the legitimacy of digital currencies, with particular emphasis on cryptocurrencies such as Bitcoin. The research adopts a descriptive-analytical method and evaluates the concepts of property, monetary value, lawful benefit, customary recognition, contractual consent, and the general validity of transactions. It also analyzes major jurisprudential objections to digital currencies, including gharar, jahalah, gambling, usury, unjust acquisition of wealth, and potential harm to the economic system. The findings indicate that the digital and decentralized nature of cryptocurrencies does not, in itself, negate their property status or render transactions involving them illegitimate. Where a digital currency possesses customary economic value, rational and lawful utility, transferability, and sufficient determinacy, it may constitute a legitimate object of ownership and exchange. The study further shows that the absence of recognition as official legal tender should be distinguished from the validity of private ownership and contractual transactions. Under Iranian private law, the general principles of freedom of contract and the essential conditions for the validity of transactions provide substantial capacity for recognizing cryptocurrency-related agreements, provided that they do not violate mandatory legal rules. The study concludes that the most defensible approach is one of conditional legitimacy and regulated recognition. Accordingly, digital currencies should be recognized as potentially lawful digital assets, while specific activities involving fraud, money laundering, prohibited speculation, usurious arrangements, or threats to public economic interests should remain subject to targeted regulation and legal restriction.