Pakistan's virtual assets regulator has asked the country's most influential Islamic seminary to separate speculative cryptocurrencies from asset-backed digital tokens, after a June fatwa declared crypto purchases unlawful. The regulator warns the ruling threatens Islamabad's fast-moving digital asset plans, and it is now working with scholars to define which token categories comply with Shariah.
Pakistan's crypto regulator is pushing back against a religious ruling that could stall the country's digital asset ambitions. Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority (PVARA), sought guidance from Jamia Darul Uloom Karachi after the seminary ruled last month that cryptocurrency-based purchases are not permissible under Islamic law. The fatwa raises questions about efforts to formalize a market in a nation of more than 240 million people that ranks among the world's largest retail cryptocurrency hubs.
Clerics split on what counts as wealth
The ruling exposed disagreements inside the seminary itself. Several clerics — including some who helped draft the fatwa — differ on whether certain digital assets could qualify as wealth under Shariah, with some arguing that asset-backed tokens or fully reserved stablecoins may be permissible. Others hold that cryptocurrency remains too speculative to meet Islamic standards for lawful trade.
Several scholars issued the fatwa, including Mufti Muhammad Taqi Usmani, a leading authority in Islamic finance, and it followed an inquiry about paying for books and an online course with cryptocurrency. Some clerics believe further study is needed before issuing a definitive position on newer instruments such as tokenized sukuk (Islamic bonds) or gold-backed tokens.
PVARA argues for judging tokens by category
Saqib said his organization is working with scholars to evaluate digital assets by category rather than treating them as a single class, with the key test being whether an asset qualifies as recognized wealth under Shariah. He argued that a blockchain-recorded sukuk represents ownership of a real, income-generating asset, while gold-backed tokens and fully reserved stablecoins carry enforceable claims on redeemable value. He described blockchain itself as "a record-keeping and verification technology, not a financial asset."
Speculative tokens with no underlying asset are a separate matter, and Saqib said scholars' concerns must be taken seriously. Yet the industry sees the fatwa as a real threat: Waqas Ghani, head of research at JS Global Capital, warned that the ruling could hinder broader, bank-led adoption beyond the urban trading community, though he noted that trading volumes have not yet been affected.
Source: Bitcoin News
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