Pakistan’s ambition to build a regulated crypto market has run into a formidable barrier: religion. Six scholars, led by influential thinker Mufti Taqi Usmani, signed a fatwa issued by renowned Islamic seminary Jamia Darul Uloom Karachi. Its verdict is clear - purchases made with crypto, including stablecoins such as USDT, are not permissible.
According to their interpretation, digital tokens fail to qualify as recognized wealth or property under Islamic law. In a nation of approximately 231.7 million residents, where 96.35% identify as Muslim, religious guidance carries significant influence over public adoption.
An Unexpected Response from Regulators
Rather than challenging the fatwa, Bilal bin Saqib, head of the Pakistan Virtual Assets Regulatory Authority (PVARA), opted for diplomacy. Following a meeting with Mufti Usmani, he called for sustained dialogue on the classification of digital assets under Islamic jurisprudence. Their discussion covered blockchain technology, digital assets, stablecoins, and tokenized real-world assets.
Saqib emphasized that various digital asset categories deserve “careful technical assessment alongside rigorous Sharia examination, rather than being viewed through a single lens.” Instead of refuting the scholars’ stance, he invited all stakeholders - scholars, regulators, and industry participants - to examine the distinctions between digital asset categories in greater depth.
A Tug-of-War Between Regulation and Faith
This exchange highlights a fundamental tension: while Pakistan seeks to foster a licensed crypto market, religious objections could dictate whether the public embraces it. The country only recently shifted from years of strict prohibitions toward a regulated virtual asset framework. On April 15, the State Bank of Pakistan authorized commercial banks to open accounts for virtual asset service providers, lifting an eight-year ban. That decision followed the enactment of the Virtual Assets Act 2026 in March, which established PVARA as the official regulatory watchdog.
Why This Story Matters
Pakistan’s case is a reminder that the trajectory of crypto is not always determined by price charts or technical milestones - sometimes it is shaped by pulpits and religious doctrine. By choosing dialogue over confrontation with religious scholars, regulators have highlighted the delicate balance required in the world’s fourth-largest Muslim-majority nation. How Pakistan resolves this tug-of-war may offer a blueprint for other Muslim-majority nations evaluating the future of crypto in their jurisdictions.
Adapted from Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
