Full Breakdown
Pakistan’s Sharia Debate Over Cryptocurrency Amid a Growing Regulatory Framework
7/14/2026, 12:44:13 PM
Religious Ruling Blocks Crypto Purchases
On June 10 2026 (24 Zilhaj 1447 AH), Darul Ifta of Jamia Darul Uloom Karachi issued a fatwa signed by Mufti Taqi Usmani—former Federal Shariat Court judge—and five other senior scholars. The decree declares that buying, selling, or investing in cryptocurrencies, including stablecoins such as USDT, is impermissible under Islamic law because the tokens are “merely the recording of fictitious numbers in an account” and do not qualify as ‘maal’ (wealth) or recognized property. Consequently, transactions made with crypto do not confer ownership of the purchased goods, and buyers must return or delete the items.
Regulatory Framework and Recent Progress
Pakistan’s Virtual Assets Regulatory Authority (PVARA) operates under the Virtual Assets Act 2026, which gave the agency statutory power to license and supervise virtual-asset service providers. In April 2026 the State Bank of Pakistan lifted a long-standing ban on banks opening accounts for licensed providers, and in May 2026 the government announced plans for a state-run stablecoin and tokenised-asset sandboxes. Approximately 40 million Pakistanis are already active in informal digital-asset markets, prompting regulators to formalise the sector while seeking Sharia-compliant pathways.
Key Figures
Official Statements & Responses
The fatwa’s core argument is that cryptocurrencies lack the tangible backing required by Sharia, rendering any purchase “not permissible” and obligating the buyer to return the goods or delete digital content. PVARA’s response, articulated by Chairman Saqib, emphasizes a case-by-case technical and Sharia assessment of digital assets rather than a blanket prohibition. Saqib stresses that the regulator’s mandate is to protect users from fraud while enabling innovation, and he pledged ongoing engagement with scholars to align regulatory standards with Islamic principles.
Criticism & Opposition
While the fatwa carries significant religious weight, it is not legally binding. Some observers within the Islamic finance community argue that certain tokenised assets—those backed by real-world commodities—might satisfy Sharia criteria, suggesting the need for nuanced rulings rather than a universal ban. The debate reflects a broader tension between religious authority and state-driven fintech development.
Conflicting Reports & Gaps
Sources differ on the practical impact of the fatwa: religious scholars view it as a decisive prohibition, whereas PVARA treats it as a point of discussion. No definitive legal mechanism exists to enforce the decree, leaving the future of crypto adoption in Pakistan uncertain. Additionally, detailed criteria for what constitutes a Sharia-compliant digital asset have not been publicly outlined.
Verbatim Quotes
- “It is not permissible for you to purchase the books in question using cryptocurrency.” — Mufti Taqi Usmani, Fatwa, 24 Zilhaj 1447 AH
- “According to research and opinion of experts so far, cryptocurrency is not considered ‘maal’ (wealth) in Sharia. Instead, it is merely the recording of fictitious numbers in an account, whether in the form of USDT or other crypto tokens,” — Fatwa, Jamia Darul Uloom Karachi
- “Today, I had a constructive discussion with Mufti Taqi Usmani sahib on digital assets and the ongoing conversation around their Shariah status.” — Bilal bin Saqib, X post, July 2026
- “We are united on one fundamental objective: protecting Pakistanis from fraud, exploitation, and financial harm.” — Bilal bin Saqib, X post, July 2026
- “As such, they merit careful technical assessment alongside rigorous Shariah examination, rather than being viewed through a single lens,” — Bilal bin Saqib, X post, July 2026
What’s Next
PVARA has indicated that dialogue with scholars will continue, and the agency plans to release operational standards for stablecoins and tokenised assets later in 2026. The outcome of these discussions will determine whether Pakistan proceeds with its state-run stablecoin and how broadly crypto services can operate within a Sharia-compliant framework.
