It’s no secret that I have my doubts about the validity of paper money. I just don’t see how a paper note printed by the Federal Reserve is any different from a paper note printed by Parker Brothers. This has an important effect on how I calculate my annual Zakat.
Zakat is an annual charity given by Muslims, calculated as 2.5% of their surplus wealth, including certain commodities, like precious metals. The money should go to the poor, the hungry, the orphan, or the traveler as directly as possible.
I don’t calculate Zakat on the money in my Monopoly game. It is only out of an abundance of caution that I give Zakat on Federal Reserve notes, but I do not pay the majority of my Zakat with Federal Reserve notes. I give Zakat on my precious metals with precious metals, and give a separate donation on my paper money with paper money. I have never given Zakat on precious metals with paper money.
The advent of Bitcoin presented an interesting hiccup in this arraignment. Is Bitcoin more like Federal Reserve notes, or more like precious metals? I tackled this question in at article titled “Is Bitcoin Sharia Compliant,” and between the article, the comments made a number of highly intelligent readers, that remains to best resource I know of on the subject. I resolved then, as I do now, to give Zakat on my Bitcoin with Bitcoin, but in previous years I was never able to find a Zakat eligible charity that wanted my Bitcoin, so pledged the donation to the first Islamic charity I found.
This year I have sent my Bitcoin Zakat to The Women’s Annex Foundation which educates and empowers women through digital literacy. They currently operate primarily in Afghanistan, but also in Pakistan, Egypt and Mexico, with the goal of expanding their mission globally. In a country where it can be challenging for women to seek an education, or even to open a bank account, The Women’s Annex Foundation currently has given internet access and digital literacy courses to over 55,000 students. They have built 11 computer labs in existing schools, and 2 stand alone media labs in Herat and Kabul Afghanistan.
I cannot stress how profoundly important this work is, not only because a raising a generation of educated women is critical, but also because spreading awareness of Bitcoin to developing countries is invaluable to creating a sustainable economic model.
Many have speculated that quashing Islamic banking is the real reason that central planners target Muslim countries. The advent of Bitcoin radically alters their ability depress the economic development in the Muslim world. It not only grants civilians an alternative to their national fiat currency, it also gives civilians in aggressive nations like Israel and the United States the ability to give directly to charities in target nations for the first time in human history.
So, if you’ve got some Bitcoin burning a hole in your wallet donate to The Women’s Annex Foundation. Before you know it you may be hiring these girls to do your web design and app development.