Fatwa Spurs Debate Over Pakistan’s Digital Asset Rules

Mufti Taqi Usmani issued a fatwa on June 10 that concluded cryptocurrencies do not qualify as ‘maal', or wealth, under Sharia. The ruling described cryptocurrencies as ‘fictitious numerical entries recorded in an account' and explicitly named USDT and other crypto tokens. It said purchases made with cryptocurrency, including books and online courses, were invalid and directed buyers to return physical goods and delete digital course materials.

Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority, met Usmani on Saturday. Saqib described the discussion as constructive and wrote on X that blockchains, stablecoins, tokenized real-world assets and other digital assets ‘merit careful technical assessment alongside rigorous Shariah examination, rather than being viewed through a single lens.' He did not report any change to Usmani's ruling and called for continued engagement among religious scholars, regulators and industry experts.

Parliament passed the Virtual Assets Act in March, making PVARA a permanent federal regulator with authority to license exchanges, custodians and token issuers. Licensed firms must ensure services comply with Sharia law under the guidance of a committee of Islamic finance scholars.

Saqib has argued regulators should assess instruments such as unbacked cryptocurrencies, fiat-backed stablecoins and tokenized securities on a case-by-case basis for Sharia compliance. The fatwa applied its assessment across crypto tokens, including USDT.

PVARA has invited regulated international crypto firms to apply for local licences and estimates around 40 million users in Pakistan. In December, Binance and HTX received preliminary clearances but were not authorised to operate. The Finance Ministry signed a non-binding agreement with Binance for advisory work on tokenizing up to $2 billion in sovereign bonds, treasury bills and commodity reserves.

Government proposals under discussion include a sovereign stablecoin, a state-held bitcoin reserve and an allocation of 2,000 megawatts of electricity for bitcoin mining and artificial intelligence data centres. Regulatory licensing and Sharia oversight are part of the framework for any such projects, according to PVARA.