Pakistan's Crypto Regulator Treads Carefully Amid Shariah Fatwa

Pakistan's Virtual Assets Regulatory Authority (PVARA) is navigating a complex issue in building a digital asset framework that aligns with Islamic law. The authority, led by Bilal Bin Saqib, recently met with prominent Islamic scholar Mufti Muhammad Taqi Usmani to discuss the treatment of digital assets under Shariah law.

The meeting followed a fatwa issued on June 10, which declared purchases of goods using digital assets, including stablecoins like USDT, impermissible under Islamic principles. The core issue is that the fatwa classified digital assets as failing to qualify as legitimate wealth or 'maal' under Shariah.

Pakistan's regulatory environment for virtual assets has evolved in recent years. The Virtual Assets Act 2026 established PVARA and mandated the creation of a Shariah Advisory Committee, suggesting lawmakers anticipated this kind of tension between digital finance innovation and Islamic legal principles.

The State Bank of Pakistan permitted licensed VASPs to open bank accounts in April, moving crypto businesses from the shadows into the formal economy. With 40 million users engaged in digital assets as of mid-2026, Pakistan ranks third globally in the Chainalysis Global Crypto Adoption Index.