By Staff Reporter
KARACHI: For a country that spent the better part of a decade treating cryptocurrency as something close to contraband, Pakistan’s turn toward embracing it has been swift. Parliament passed the Virtual Assets Act in March. The State Bank followed in April, clearing licensed banks to open accounts for crypto businesses. A new federal regulator has begun issuing licenses to global exchanges. By some estimates, tens of millions of Pakistanis, and perhaps as many as 40 million, now hold digital assets worth billions of dollars.
Now one of the country’s most influential religious voices has told them, in effect, to stop.
Mufti Muhammad Taqi Usmani, a former judge of the Federal Shariat Court and among the most widely respected authorities on Islamic finance anywhere in the Muslim world, has issued a fatwa declaring that purchasing goods with cryptocurrency is not permissible under Islamic law. The ruling, dated 24 Zilhaj 1447 in the Islamic calendar, or June 10 on the Western one, holds that digital currencies do not meet the definition of “maal,” the Arabic term for wealth or property, and are therefore invalid as a means of paying for anything at all.
It is, in its way, a modest-sounding technical opinion. Its implications are not.
The ruling was issued through Darul Ifta at Jamia Darul Uloom in Karachi, the seminary where Usmani serves as president, and carries five additional signatures from senior scholars there. His son, Hassan Usmani, confirmed to the Pakistani media that the document, which had begun circulating widely on social media in recent days, was authentic and had indeed come from his father.
A question about two books
The fatwa did not emerge from an abstract theological seminar. It came in response to a specific question from someone who had made two purchases using digital currency: one book bought with an unspecified crypto token, a second with USDT, a so-called stablecoin pegged to the U.S. dollar and among the most widely used forms of digital payment in Pakistan. The buyer wanted to know whether those transactions held up under Islamic law, and if not, what he was obligated to do about it.
Usmani’s answer left little room for interpretation. “It is not permissible for you to purchase the books in question using cryptocurrency,” the ruling states, adding that because digital currency is not recognized as wealth in Sharia, no valid transfer of ownership had occurred in the first place. The books, in the fatwa’s reasoning, still belonged to the seller. The buyer was instructed to give them back.
The reasoning behind that conclusion is where the ruling gets more expansive. Cryptocurrency, the fatwa argues, is not property in any sense Islamic law recognizes — “merely the recording of fictitious numbers in an account,” in its own phrasing, whether the currency in question is a stablecoin like USDT or any other token. That distinction matters enormously in Islamic commercial law, where a valid sale requires an exchange of things that qualify as genuine wealth. If the currency itself fails that test, nothing bought with it can be validly owned, no matter how the transaction was conducted or how willingly both parties entered into it.
A second case, complicated by piracy
The same questioner raised a second, thornier scenario. He had also purchased an online educational course, paid for in cryptocurrency, from someone who was not authorized to sell it. According to the account laid out in the query, the course’s original creator had explicitly barred the reseller from copying, keeping, or distributing the material. The reseller ignored that restriction anyway, built a private group for paying customers, and funneled out portions of the course after collecting payment.
Usmani’s ruling treated the purchase as doubly flawed: invalid because of the currency used to pay for it, and separately unlawful because the material itself had been obtained through what the fatwa described as a violation of the law. The instruction to the buyer was unambiguous. He was told not to use the course, not to pass it on to anyone else, and — because the material existed only in digital form and, in the fatwa’s view, remained the property of the original seller regardless of the sale — to delete every file related to it from his devices.
The fatwa grounds both conclusions in classical Islamic jurisprudence, drawing on established texts governing what does and doesn’t constitute valid property under Sharia.
A scholar whose word carries unusual weight
Usmani’s standing in the Muslim world is not incidental to why this ruling has drawn attention well beyond Pakistan’s borders. He has spent decades as one of the most prominent voices in Islamic finance globally, credited with helping shape the standards that govern Sharia-compliant banking as it is practiced today from Kuala Lumpur to London. He also serves as president of Wifaq-ul-Madaris Al-Arabia Pakistan, the country’s largest network of religious seminaries, a position that extends his influence deep into Pakistan’s religious education system.
He is not the first major Islamic scholar to raise objections to cryptocurrency, nor is his the only opinion on the subject. The Grand Mufti of Egypt, Shawki Allam, has separately declared Bitcoin impermissible, arguing that digital assets lack the stability and institutional backing that traditional currencies rely on. Scholars in South Africa, by contrast, including figures affiliated with Darul Uloom Zakariyya, have reached the opposite conclusion, holding that Bitcoin and similar currencies can qualify as legitimate wealth under Sharia. The question has divided Islamic finance scholars for years, without anything resembling consensus.
What sets Usmani’s ruling apart is less its content than its source. Few living scholars carry his authority on questions of Islamic commercial law, and in Pakistan specifically, a fatwa bearing his name is not something practicing Muslims are likely to shrug off.
A collision with government policy
The timing is what gives the ruling its edge. Pakistan banned cryptocurrency outright in 2018, when the State Bank barred banks and payment providers from touching virtual currencies in any form. That prohibition held, more or less, for years, even as adoption among ordinary Pakistanis kept climbing regardless, driven in no small part by inflation, a weakening rupee, and the appeal of moving money across borders more cheaply than traditional channels allow.
The reversal, when it came, was fast. A Pakistan Crypto Council was established last year to coordinate policy across the country’s financial regulators. A presidential ordinance followed in July 2025, creating the Pakistan Virtual Assets Regulatory Authority on a temporary basis. By March of this year, parliament had converted that ordinance into permanent law, giving the new authority full power to license and supervise crypto exchanges, wallet providers, and other digital asset businesses, with criminal penalties on the books for anyone operating outside the system. The State Bank cleared licensed banks to open accounts for those businesses the following month. Global exchanges have already begun receiving approval to operate in the country.
Officials have framed the shift as recognition of a reality that had outrun the old rules: a market that, by various estimates, involves tens of millions of Pakistani users and transaction volumes in the billions of dollars annually, conducted for years in a legal gray zone that satisfied no one. The new law even includes its own Shariah advisory committee, intended to ensure that licensed crypto activity in Pakistan meets Islamic finance standards, a detail regulators have pointed to as evidence the framework was built with religious concerns already in mind.
Usmani’s fatwa suggests, at a minimum, that not every religious authority is convinced the problem has been solved.
What the ruling can and cannot do
A fatwa is not a law, and this one carries no enforcement mechanism. Pakistan’s civil courts are not bound by it. The Virtual Assets Act remains in effect regardless of what any individual scholar concludes, and nothing about Usmani’s ruling changes what is or is not legal under Pakistani statute.
What it can do is shape conscience, and in a country where religious observance runs deep, that is not a small thing. For millions of practicing Muslims who take Sharia compliance seriously in their financial lives, a ruling from a scholar of Usmani’s stature is not easily set aside simply because it lacks legal force. It creates, for those users, an uncomfortable question that the country’s new regulatory framework does not resolve: an acknowledgment from the state that crypto is not going anywhere, paired with a signal from religious authority that engaging with it may not be permissible at all.
Whether that tension changes behavior on any meaningful scale is not yet clear, and may not be for some time. What is clear is that Pakistan’s crypto users, its exchanges, and its regulators are now navigating two very different sources of authority that, for the moment, are not pointing in the same direction.
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