Pakistan's leading Islamic seminary, Jamia Darul Uloom Karachi, issued a fatwa on Friday declaring that cryptocurrencies, including stablecoins like USDT, do not meet the criteria for wealth or property under Shariah law. The ruling, signed by Mufti Taqi Usmani and five other scholars, directly challenges the country's ongoing efforts to regulate digital assets.
Scholars' Ruling: Crypto Fails Shariah Wealth Test
According to Pakistani newspaper Dawn, the scholars determined that digital tokens cannot be considered valid property under Islamic principles. Mufti Taqi Usmani, a top authority in Islamic jurisprudence, stressed that compliance with Shariah is essential for any new financial instrument in Muslim-majority societies. Pakistan's 2023 census shows 96.35% of its over 231 million population are Muslim, amplifying the ruling's potential impact on public trust and policy.
PVARA Responds: Assets Are Diverse, One Verdict Not Enough
Bilal bin Saqib, head of the Pakistan Virtual Assets Regulatory Authority (PVARA), stopped short of directly contesting the fatwa. Instead, he called for ongoing dialogue and emphasized that blockchain technology, digital assets, stablecoins, and tokenized real-world assets span a wide range of technologies and applications that should not be judged with a single verdict. He also warned about risks ordinary Pakistanis face, including exploitation and fraud as the crypto market develops.
Regulatory Progress: From Ban to Licensed Framework
Despite the religious backlash, Pakistan is moving from restriction to oversight. The Virtual Assets Act 2026, passed in March, established PVARA as the main regulator. On April 15, the State Bank of Pakistan allowed banks to open accounts for licensed VASPs, ending an eight-year prohibition on banking services for the crypto sector. These steps signal a shift toward legal structure and consumer protection. With PVARA calling for further dialogue, the industry now faces the task of defining precise Shariah-compliant rules for digital assets while safeguarding users.