Pakistan Virtual Assets Regulatory Authority (PVARA) chairman Bilal bin Saqib has urged continued consultation between regulators, scholars, and industry figures after prominent Islamic scholar Mufti Taqi Usmani voiced opposition to using cryptocurrency for purchases under Islamic law.
Islamic scholars issue ruling on crypto assets
The engagement between Saqib and Mufti Taqi Usmani followed a legal ruling (fatwa) issued on Friday by Jamia Darul Uloom Karachi, a leading Islamic seminary. According to the Pakistani newspaper Dawn, Usmani and five additional scholars determined that transactions made using cryptocurrencies, including stablecoins such as USDT, do not conform to Islamic law. Their view stems from the belief that digital tokens do not meet the criteria for property or wealth as defined by Shariah principles.
Mufti Taqi Usmani, recognized as a leading authority in Islamic jurisprudence, emphasized that compliance with Shariah is essential for the use of new financial instruments in predominantly Muslim societies.
Bilal bin Saqib stopped short of directly contesting the scholars’ ruling. Instead, he emphasized the importance of careful study and technical assessment for the wide range of digital assets, including stablecoins and tokenized real-world assets, under Islamic law.
In his remarks, Saqib highlighted that blockchain technology, digital assets, stablecoins, and tokenized real-world assets span a diverse set of technologies and applications, which, he argued, should not be judged with a single verdict.
He also expressed concern for the risks faced by ordinary Pakistanis, noting the need for safeguards against exploitation, fraud, and financial harm as the crypto market develops.
Mini dictionary: Jamia Darul Uloom Karachi: A prominent Islamic seminary in Karachi, Pakistan, known for its scholarly influence in religious and legal matters, particularly within the context of Islamic law and finance.
Crypto laws advance amid religious debate
The latest debate reflects ongoing tension between Pakistan’s plans to regulate digital assets and the reservations expressed by religious authorities. Pakistan, a nation with over 231 million people, has a population that is 96.35% Muslim, according to the 2023 census. This demographic reality underscores the potential impact of religious legal opinions on policy and public trust in financial innovation.
The discussion arrives at a pivotal moment for Pakistan’s crypto sector, as the government shifts its approach from restriction to regulated oversight. On April 15, the State Bank of Pakistan permitted banks to open accounts for virtual asset service providers (VASPs) licensed by the PVARA, ending an eight-year prohibition on banks interacting with the crypto sector.
| Key Milestone | Date | Restriction/Law |
|---|---|---|
| Bank account access for VASPs | April 15, 2024 | Allowed for licensed VASPs, lifting previous bank restrictions |
| Virtual Assets Act passage | March 2026 | Established PVARA for regulation and licensing |
These regulatory steps followed the approval of the Virtual Assets Act 2026 in March, which set up the PVARA as the main authority for overseeing and licensing Pakistan’s virtual asset sector. The Act is seen as a turning point in the effort to provide legal structure and consumer protection for digital asset activities.
As regulatory changes take hold, further dialogue between industry participants and religious scholars appears likely, with the aim of defining precise rules for crypto assets in compliance with religious law and protecting users from financial risks.
