Pakistan's Crypto Shariah Debate Sparks Heated Discussion Among Islamic Scholars

Pakistan is one of the world's biggest crypto markets, and its government wants to lead in digital assets. But first, they need to figure out if Bitcoin and other cryptos are allowed under Islamic law.

The debate centers around a fatwa issued by Jamia Darul Uloom Karachi, a top religious school, on June 10. Mufti Taqi Usmani and other senior scholars signed it, ruling that purchases made with Bitcoin (BTC), stablecoins, and other digital tokens are banned because they're 'merely the recording of fictitious numbers in an account.'

Mufti Usmani advises Meezan Bank on Shariah compliance, which carries significant weight. In 2008, he judged that up to 85% of sukuk, or Islamic bonds, failed Shariah tests, leading to a sharp decline in global issuance.

But not all Islamic scholars agree. Saylani Welfare International Trust, one of Pakistan's largest charities, issued a fatwa around 13 months ago treating crypto as a recognized right, provided transactions are not prohibited by law and do not expose individuals to unlawful humiliation or punishment.