Pakistan regulator urges dialogue after crypto fatwa

TLDR

Pakistans top crypto regulator is responding to a new religious ruling against crypto payments by pushing for dialogue and case?by?case Sharia review of digital assets.

1. Influential scholar Mufti Taqi Usmani issued a fatwa saying crypto purchases are not valid under Sharia, calling tokens fictitious numbers without true wealth status.
2. Pakistans Virtual Assets Regulatory Authority (PVARA) is not rejecting the fatwa but urges technical and Sharia assessments of different asset types, aligned with the countrys new crypto framework.
3. For Pakistans large Muslim user base, the outcome could decide whether stablecoins, tokenized assets and some crypto uses remain permissible, so future scholarregulator talks are critical to watch.

Deep Dive

1. What The Fatwa Says

Islamic scholar Mufti Taqi Usmani and several colleagues at Jamia Darul Uloom Karachi issued a fatwa stating that cryptocurrencies, including stablecoins like USDT, do not qualify as maal or wealth under Sharia.

The ruling describes crypto as fictitious numbers in an account and says purchases with crypto do not create lawful ownership of goods, even instructing buyers to return books and delete online course materials acquired with tokens. Reports from outlets such as The Block and Cointelegraph confirm these points.

Because around 96 percent of Pakistans 230 million people are Muslim, such a ruling can strongly influence individual behavior and political appetite for crypto.

2. Regulators Dialogue Approach

Bilal bin Saqib, chairman of PVARA, met Usmani and publicly called for ongoing dialogue rather than confrontation, stressing shared goals of protecting Pakistanis from fraud and financial harm.

He argues that blockchains, stablecoins and tokenized real?world assets represent different technologies and use cases that should be reviewed individually, not under a single blanket verdict, as highlighted in PVARA comments.

This comes as Pakistan rolls out the Virtual Assets Act 2026, establishing PVARA as a federal regulator and allowing banks to serve licensed crypto firms under Sharia oversight, creating a formal channel that now faces religious scrutiny.

3. Impact And What To Watch

Religious approval will likely determine whether Pakistan can move ahead with plans like licensed exchanges, a sovereign stablecoin or tokenized state assets, all currently under study according to recent policy reports.

Key signals to watch include whether scholars begin distinguishing between speculative unbacked coins, fiat?backed stablecoins and tokenized securities, and whether any asset classes are explicitly endorsed as Sharia?compliant.

For Pakistani users and firms, the main near term risk is regulatory and religious uncertainty, not an immediate legal ban, so attention will focus on future joint statements from PVARA and leading scholars.

Conclusion

Pakistan is now testing whether a modern crypto framework can coexist with strict Sharia interpretations that currently reject crypto payments.

If regulators and scholars converge on a nuanced, category?based approach, Pakistan could emerge as a leading market for Sharia?compliant stablecoins and tokenized assets. If they do not, religious pressure could constrain much of the countrys crypto activity despite recent regulatory progress.