Short Answer: Yes.
Take the value of your Crypto and convert it to gold. If your crypto wallet’s value is more than the value of 595 grams of gold for a year or more, then you must pay 2.5% of your cryptocurrency in Zakat for the year.
Longer answer: Why do you hold crypto?
Many people will say because it's a good store of value. Others will say it's a safe alternative to fiat currencies and even gold. Some people will mention all of the above.
Because it is a currency and you are holding it because it is a currency, then you must pay Zakat on it. If you were holding the same amount of value for the same purpose at the time of the Prophet, do you have any doubt that you would be liable to pay Zakat on it? I personally have no doubt that you would have to, because the reasons for you holding it and the reasons for having to pay Zakat on Gold are exactly the same. It is a store of value accepted for payment by a broad community of people.
A majority of scholars, classically and in the modern period, held that if a currency not found during the Prophet’s time functions exactly like how gold and silver function, then we can regard them to be the same and apply the same rules to it. So just as you can’t loan out your gold for interest, as that would be Riba, and you can’t loan out your crypto for interest, as that would be Riba, then you must also pay Zakat on your savings in Crypto, just as you have to pay Zakat on your savings in Gold.
So how then do you determine how much crypto you have to hold in order to be liable for Zakat?
Here are a few rules of thumb:
- Zakat is due on the market value of your Crypto.
- Regardless of whether your cryptocurrency holdings are tokens (utility or work) or exchangeable coins, both are liable for Zakat.
Steps for calculating your Zakat on Crypto:
- Find the value of 595 grams of gold in your crypto currency.
- If you’ve had a consistent value greater than 595 grams of gold in your wallet on the month's end for an entire 12 months, then you will pay Zakat on the total value of your wallet.
- Pay 2.5% of your wallet’s value either in the same cryptocurrency or in it’s value of fiat currency or precious metals.
If you cannot find a reliable market quote for converting your crypto value into gold, you can take the market price for gold in your local currency, then convert your crypto value into your local currency to find out how much you should give.