By Staff Reporter
ISLAMABAD: The head of Pakistan’s virtual assets regulator has asked the country’s most influential Islamic seminary to distinguish between speculative cryptocurrencies and digital tokens backed by real assets, an attempt to contain the fallout from a religious ruling that has unsettled the government’s crypto ambitions.
Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority, said in an interview with Reuters that he made the request after Jamia Darul Uloom Karachi ruled last week that purchases made with cryptocurrency are not permissible under Islamic law. The seminary, whose edicts carry weight among Muslims well beyond Pakistan’s borders, is now in discussions with the regulator over how to assess digital assets by category rather than as a single class, Saqib said.
The fatwa has injected uncertainty into a policy push that has moved with unusual speed. Pakistan, a nation of more than 240 million people, has long ranked among the world’s largest crypto markets by retail activity, and its parliament passed the Virtual Assets Act in March, establishing PVARA as a permanent federal regulator with authority to license exchanges, custodians and token issuers.
The ruling, issued by Darul Ifta at Jamia Darul Uloom Karachi and dated June 10, carries the signatures of Mufti Muhammad Taqi Usmani, a former judge of the Federal Shariat Court, and five other scholars.
It found that cryptocurrency does not meet the Shariah definition of “maal,” or wealth, describing it instead as merely the recording of fictitious numbers in an account, whether held as USDT or other tokens. The scholars were responding to specific questions about buying books and online courses with crypto, concluding that such purchases do not constitute valid transfer of ownership. Buyers who used cryptocurrency to acquire books, the ruling stated, must return them.
“The central question the fatwa raises is whether a digital asset constitutes recognized wealth under Shariah,” Saqib said. “That is precisely the right question, and it is why these instruments must be examined individually.”
Saqib drew a line between token types in his conversation with Reuters. A blockchain-recorded sukuk, or Islamic bond, represents ownership of a real, income-generating asset, he said, while gold-backed tokens or fully reserved stablecoins carry an enforceable claim on something tangible and redeemable. Blockchain itself, he added, is a record-keeping and verification technology rather than a financial asset in its own right. Purely speculative tokens with no underlying asset sit in a different category, he acknowledged, and “the scholars’ concerns there must be taken seriously.”
“We will continue working closely with our scholars as Pakistan develops its licensing framework and advances work on stablecoins and real-world asset tokenization,” Saqib said. “Pakistan has the opportunity to lead the world in Shariah-compliant digital finance, and that leadership must be built with our scholars.”
The seminary did not immediately respond to a request for comment.
Saqib’s public outreach began days after the fatwa surfaced. He met with Usmani in person and described the exchange afterward as a “constructive discussion,” telling the scholar that blockchain technology, digital assets, stablecoins and tokenized real-world assets span a broad range of technologies and use cases that resist a single classification. Saqib did not say Usmani had shifted his position as a result of the meeting.
The regulator’s effort to reach an accommodation reflects the practical stakes for Pakistan’s banking sector, where religious rulings carry outsized influence in a country that is overwhelmingly Muslim. Waqas Ghani, head of research at brokerage and investment banking firm JS Global Capital, said the fatwa as it stands could become a hurdle to broader, bank-led crypto adoption beyond Pakistan’s urban trading community. Retail trading volumes, however, have so far shown no sign of a slowdown, he said.
PVARA operates as an autonomous federal body under a multi-stakeholder board that includes the governor of the State Bank of Pakistan, giving the central bank direct visibility into how the dispute over the fatwa’s scope is resolved. How that resolution takes shape is likely to determine whether Pakistan’s licensing regime — and its stated ambition to position itself as a hub for Shariah-compliant digital finance — can move forward with the banking sector’s participation intact.
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