The Pakistan Virtual Assets Regulatory Authority (PVARA) recently initiated a dialogue on the Shariah compliance of digital assets, following a significant religious decree that declared cryptocurrency payments impermissible. Bilal bin Saqib, Chairman of PVARA, met with renowned Islamic scholar Mufti Muhammad Taqi Usmani on July 11, 2026, to discuss the complex intersection of blockchain technology and Islamic law.
Islamic Scholars Issue Fatwa Against Crypto
The call for dialogue comes in the wake of a fatwa, or religious decree, issued on June 10, 2026, by Mufti Muhammad Taqi Usmani and five other prominent scholars from Jamia Darul Uloom Karachi. This ruling declared that purchases made with cryptocurrencies, including stablecoins like USDT, are not permissible under Islamic law. The scholars concluded that digital tokens do not qualify as 'maal' (wealth or property) in the Islamic legal sense, as they are considered merely numerical entries in electronic accounts rather than tangible assets with recognized value.
PVARA Calls for Continued Discussion
In response to the fatwa, PVARA Chairman Bilal bin Saqib emphasized the need for ongoing engagement between religious scholars, regulators, and industry experts. During his meeting with Mufti Usmani, Saqib highlighted that blockchain, digital assets, stablecoins, and tokenized real-world assets represent a broad spectrum of technologies and use cases. He argued that these diverse categories merit careful technical assessment alongside rigorous Shariah examination, rather than being viewed through a single lens. Saqib underscored a shared objective: protecting Pakistanis from fraud, exploitation, and financial harm in the evolving digital asset landscape.
Pakistan's Evolving Regulatory Landscape
This religious scrutiny emerges as Pakistan is actively working to establish a regulated virtual asset sector. In March 2026, the country passed the Virtual Assets Act 2026, which established PVARA as the statutory body responsible for licensing and oversight of virtual asset activities. Furthermore, on April 15, 2026, the State Bank of Pakistan (SBP) reversed an eight-year restriction, allowing banks to open accounts for Virtual Asset Service Providers (VASPs) licensed by PVARA. This move signaled a significant shift towards integrating digital assets into Pakistan's formal financial system, aiming to attract compliant trading platforms and explore blockchain-based infrastructure for cross-border payments.
What to Watch
The dialogue between PVARA and Islamic scholars is crucial for shaping the future of cryptocurrency adoption and regulation in Pakistan, a country with a significant Muslim population where religious views carry considerable weight. The challenge lies in balancing the potential of emerging financial technologies with adherence to Islamic principles. Future discussions will likely focus on developing Shariah-compliant frameworks that can accommodate various digital asset categories, potentially influencing retail participation and the broader acceptance of crypto within the nation's financial ecosystem. The outcome of these ongoing engagements will be vital for Pakistan's ambition to build a robust and religiously compliant digital asset market.
Original announcement: Bilal bin Saqib (X Post)