Pakistan’s top virtual assets regulator has called for a nuanced Shariah review of digital assets following a religious edict that broadly rejected purchases made with cryptocurrency, including the stablecoin USDT.
Chairman Bilal bin Saqib of the Pakistan Virtual Assets Regulatory Authority (PVARA) revealed on Saturday that he held a “constructive discussion” with leading Islamic scholar Mufti Taqi Usmani one day earlier. The meeting came after a fatwa issued on June 10, 2026 by Darul Ifta at Jamia Darul Uloom Karachi, signed by Mufti Usmani and five other scholars, declared that purchases using cryptocurrency are not permitted under Islamic law.
The fatwa explicitly stated that cryptocurrencies do not qualify as “maal,” or wealth, under Sharia and described them as “merely the recording of fictitious numbers in an account.” It applied its reasoning directly to USDT and other tokens, invalidating transactions for physical goods and digital services alike.
Saqib did not overturn the ruling but urged separate assessments. “Blockchains, stablecoins, tokenized real-world assets, and other digital assets cover different technologies and uses. They merit careful technical assessment alongside rigorous Shariah examination, rather than being viewed through a single lens,” he said in a public statement. He called for continued engagement among scholars, regulators, and industry specialists.
The dispute adds a religious compliance layer to Pakistan’s rapidly developing crypto framework. The Virtual Assets Act 2026 established PVARA as the federal licensing and supervisory body for exchanges, custodians, and token issuers. Firms must now ensure Sharia compliance under a committee of Islamic finance scholars, potentially allowing regulators to distinguish between unbacked cryptocurrencies and asset-backed tokens.
Pakistan has moved aggressively to build a regulated digital asset market. The State Bank of Pakistan recently ended an eight-year banking ban for licensed crypto firms, and the government signed non-binding agreements with Binance to study tokenizing up to $2 billion in sovereign assets and a USD1 stablecoin for cross-border payments. However, the fatwa’s direct rejection of USDT — the world’s largest stablecoin — as an unlawful payment method could complicate those initiatives and force licensed firms to seek alternative Shariah-compliant instruments.
