Pakistan crypto fatwa spurs regulator consultations

TLDR

Pakistans top Islamic scholars have declared most crypto transactions impermissible under Shariah, prompting Pakistans new virtual assets regulator to seek structured consultations.

1. Mufti Taqi Usmani and other scholars issued a fatwa saying cryptocurrencies, including stablecoins like USDT, do not qualify as valid wealth or money under their interpretation of Islamic law.
2. Pakistans Virtual Assets Regulatory Authority (PVARA) chief Bilal bin Saqib is responding with dialogue between scholars, regulators and industry as the country shifts from a ban toward a licensed crypto regime.
3. For crypto users, the outcome will shape whether Shariah-compliant digital assets and services emerge in Pakistan or whether religious opinion pushes policy toward stricter limits on everyday crypto use.

Deep Dive

1. What The Fatwa Says

Jamia Darul Uloom Karachi scholars, led by Mufti Taqi Usmani, issued a religious ruling stating that buying with crypto, including major stablecoins like USDT, is not permitted because digital tokens do not meet Shariah criteria for property or wealth under their view of Islamic jurisprudence.

The ruling argues that crypto lacks the recognized legal status of money and exposes users to speculative and fraud risks, which they see as incompatible with Shariah principles of fairness and asset-backed value.

Given that around 96 percent of Pakistans population is Muslim, such a fatwa carries real social and political weight and can influence both public behavior and regulatory choices.

2. How Regulators Are Responding

Bilal bin Saqib, chairman of Pakistans Virtual Assets Regulatory Authority (PVARA), has publicly called for ongoing consultation after meeting Mufti Usmani, urging that different digital assets, from stablecoins to tokenized real world assets, be assessed individually rather than under a single blanket verdict in recent commentary.

This comes as Pakistan moves from years of restrictions to a licensed framework: the State Bank has allowed banks to open accounts for licensed virtual asset service providers, and the Virtual Assets Act 2026 formally created PVARA as the statutory crypto regulator under new rules.

Regulators appear focused on two goals at once: satisfying Shariah concerns while building safeguards against fraud, exploitation and financial harm as local crypto markets expand.

3. What To Watch Next

Key questions now are whether scholars refine their stance to differentiate speculative coins from more stable or asset-backed tokens, and whether PVARA promotes a Shariah-compliant digital asset standard instead of a de facto ban.

Signals to watch include any formal guidance from PVARA on compliant products, bank behavior toward licensed exchanges and wallets, and follow-up opinions from leading religious bodies that either soften or reinforce the fatwa.

Conclusion

Pakistans crypto fatwa has turned religious concerns into a central input for policy just as the country rolls out its first dedicated virtual assets framework.

The consultations now underway will likely determine whether crypto in Pakistan evolves into a tightly controlled, Shariah-aligned niche or faces broader restrictions on everyday use, with outcomes that matter for both local users and global projects targeting Islamic markets.