Pakistan regulator meets Islamic scholar on crypto ruling
In brief
- PVARA chairman Bilal bin Saqib met Mufti Taqi Usmani to discuss blockchain and digital assets following an anti-crypto Islamic ruling
- Jamia Darul Uloom Karachi ruled crypto and stablecoins don't qualify as recognized wealth under Islamic law
- Discussion covered blockchain, digital assets, stablecoins, tokenized real-world assets, and fraud protection
- Pakistan's Virtual Assets Act established PVARA as the regulatory body for crypto licensing and oversight
- State Bank of Pakistan allowed banks to open accounts for regulated crypto providers in April, ending an eight-year restriction
The Ruling and Its Scope
Mufti Taqi Usmani and five other scholars signed an Islamic legal ruling issued by Jamia Darul Uloom Karachi, a prominent Islamic seminary. The ruling stated that purchases made with crypto, including stablecoins such as USDT, were not permitted because digital tokens did not qualify as recognized property or wealth under their interpretation of Islamic law.
This carries real weight in Pakistan. About 96.35% of the population identified as Muslim in the 2023 census, making Islamic legal opinions influential in shaping public and policy attitudes toward financial instruments.
The Regulator's Response
Saqib didn't dismiss the ruling outright. Instead, the discussion covered blockchain technology, digital assets, stablecoins and tokenized real-world assets, as well as the need to protect Pakistanis from fraud, exploitation and financial harm.
Saqib's position is more nuanced than a blanket approval. Different categories of digital assets merit careful technical assessment alongside rigorous Shariah examination, rather than being viewed through a single lens, he stated. It's a plea for granularity—not all tokens are the same, and blanket rulings may miss important distinctions.
A Regulatory Pivot
Pakistan is shifting from years of restrictions toward a licensed virtual-asset sector. The Virtual Assets Act 2026 was passed in March, establishing PVARA as the statutory body responsible for licensing and oversight of virtual asset activities.
Momentum built in April. On April 15, the State Bank of Pakistan allowed banks to open accounts for virtual asset service providers licensed by the PVARA, ending an eight-year restriction on regulated institutions dealing with crypto. That move signaled willingness to integrate the sector into the formal financial system.
The meeting between Saqib and Usmani suggests the regulator understands it can't ignore religious and cultural concerns. Dialogue now may prevent conflict later.
