What is Zakat on Cryptocurrency?
Zakat (الزكاة) is one of the Five Pillars of Islam — an obligatory annual charitable giving of 2.5% of qualifying wealth held above the Nisab threshold for one lunar year. In the modern era, contemporary Islamic scholars have extended this obligation to cover digital assets including cryptocurrency.
The majority position among Islamic finance scholars and institutions (including the Accounting and Auditing Organization for Islamic Financial Institutions — AAOIFI) is that cryptocurrency is zakatable wealth and must be included in your annual zakat calculation.
How to Calculate Zakat on Crypto: Step by Step
Determine Your Hawl Date
The hawl is the date your portfolio first exceeded the Nisab threshold. Zakat is only due after holding above Nisab for one complete lunar year (354 days). Mark this date on your calendar — it's your annual zakat due date.
Value Your Entire Crypto Portfolio
On your hawl date, calculate the total USD value of all halal cryptocurrencies you hold. Include coins on exchanges, in hardware wallets, and in cold storage. Use the live market price — not your purchase price.
Check Against the Nisab Threshold
If your total portfolio value exceeds the Nisab (85g of gold ≈ $7,500–8,500 or 595g of silver ≈ $450–600), you are obligated to pay zakat. Most scholars recommend using the silver Nisab as it includes more people in the obligation.
Calculate 2.5% of Total Value
Multiply your total portfolio value by 0.025 (2.5%). This is your zakat obligation. You can pay in cryptocurrency or its USD equivalent. Payment should be made to eligible recipients (the eight categories mentioned in Surah At-Tawbah 9:60).
Pay Before Your Next Hawl Date
Zakat should be paid promptly once due. Deliberately delaying payment without valid reason is considered sinful. Many Muslims integrate crypto zakat into their annual Ramadan giving.
Nisab Explained: Gold vs Silver Standard
Gold Nisab (85 grams)
If 85 grams of gold exceed the value of your portfolio, zakat is not due. At current gold prices (~$90/gram), this equals approximately $7,650 USD. This is the stricter threshold — fewer Muslims will meet it.
Silver Nisab (595 grams)
If 595 grams of silver exceed the value of your portfolio, zakat is not due. At current silver prices (~$0.85/gram), this equals approximately $505 USD. The majority of contemporary scholars recommend this threshold as it ensures more wealth reaches those in need.
Which should I use? Most contemporary scholars recommend the silver Nisab. The Prophet ﷺ historically used silver as the primary currency standard for zakat. Using gold Nisab in the modern era may exempt many wealthy Muslims from their obligation.
Special Cases in Crypto Zakat
Bitcoin (BTC)
Bitcoin is the most straightforward case. Treat it like gold — a store of value with no attached yield. Calculate zakat on the current market value of your BTC holding at your hawl date. Pay 2.5% in USD or BTC equivalent.
Ethereum and Staking Rewards
Ethereum spot holdings are treated like trade goods. For staking rewards, two opinions exist: (1) add rewards to your total portfolio and pay zakat at your hawl date; (2) pay zakat on rewards as you receive them, treating them as business income. The first position is more widely adopted.
DeFi Yield Farming
Halal DeFi yield (from DEXes that share trading fees without interest mechanics) is generally treated as business income. Pay 2.5% on yields when received. If yields come from interest-based lending protocols, the underlying activity may be haram — consult a scholar.
NFTs
NFTs held for investment (with intent to sell) are zakatable at their market value. NFTs used purely for personal enjoyment are debated. Trading profits from NFT sales may be subject to zakat as trade income.
Crypto in Cold Storage
Location does not affect zakat obligation. Crypto in hardware wallets, paper wallets, or cold storage is still part of your zakatable portfolio. The ownership is what matters, not where it is held.