Pakistan regulator and clerics debate crypto's Sharia compliance

Islamic scholar Mufti Muhammad Taqi Usmani issued a fatwa declaring cryptocurrencies such as Bitcoin, Ethereum and stablecoins like USDT haram, stating they do not qualify as legitimate wealth under Sharia law. The ruling sparked a response from Pakistan’s Virtual Assets Regulatory Authority (PVARA). Chairman Bilal Bin Saqib met with Usmani, emphasizing that blockchain technologies, digital assets, stablecoins and tokenised real‑world assets should each undergo separate technical assessment and comprehensive Sharia‑h review. He expressed a shared goal of protecting Pakistanis from fraud, exploitation and financial harm, tweeting, “Today, I had a constructive discussion with Mufti Taqi Usmani Sahib on digital assets … we are united on one fundamental objective: protecting Pakistanis from fraud, exploitation and financial harm.”

Pakistan’s government has been advancing a regulated crypto framework: the Virtual Assets Act 2026 created PVARA, which now licenses virtual‑asset service providers and has secured bank‑account access for them. The country ranks third globally in crypto adoption, with roughly 40 million users. The regulator stresses ongoing dialogue among scholars, policymakers and industry experts to develop Sharia‑compliant policies that can integrate digital assets into the formal economy while respecting Islamic principles. No immediate market impact was observed, but the debate will shape public acceptance and the future regulatory landscape.

The discussion reflects a broader tension between Pakistan’s ambition to become a hub for blockchain‑based finance and the influential religious verdict that could affect the sector’s societal acceptance.