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FollowingDifferences between Pakistan virtual asset officials and Islamic scholars: Cryptocurrency fatwa sparks controversy
Pakistan's top virtual asset official, Bilal bin Sakib, met with an Islamic scholar who recently ruled that the use of cryptocurrency to purchase anything is prohibited. Sakib concluded that stablecoins, tokenized assets, and original crypto tokens should be reviewed separately. The disagreement is significant because Pakistan is developing a licensing system that requires digital assets to legally comply with Islamic law. About 30 million to 40 million Pakistan currently own cryptocurrencies.
Contents of the fatwa
Bilal Bin Sakib is the chairman of the Virtual Assets Regulatory Authority of Pakistan (PVARA). Sakib posted on platform X that the meeting with Mufti Taqi Osmani on July 11 was a "constructive discussion" and said both wanted to protect Pakistan from "fraud, exploitation and economic harm."
However, Sakib pointed out that blockchain, fiat backed stablecoins, and tokenized real-world assets are not the same thing and should not be treated equally. He added that each required "careful technical evaluation accompanied by a rigorous Shariah review."
Osmani and other scholars in the Shariah Order Department of Jamia Darrul Ulum Islamic Academy in Karachi issued the ruling on June 10 and was widely circulated last Friday. The ruling held that cryptocurrencies do not meet the meaning of "property"(maal) in the Islamic legal concept. Scholars call it a fictitious number entry in the account. USDT is directly named along with other tokens.
Scholars were asked to discuss the purchase of books and online courses through cryptocurrencies. They argued that the purchases were invalid and that the buyer never obtained legal ownership. Buyers are required to return the books and delete course materials, and are not allowed to use or transfer them to others. The ruling covers both physical goods and digital services, so it not only targets speculative crypto transactions, but also involves daily consumption.
According to local media reports, the fatwa stated that labeling a coin as a "virtual currency","token" or "stablecoin" does not change its nature because they all fall into the same prohibited category.
Fatah is not a national law, but Osmani is a well-known figure in the Islamic finance field, and his opinions are likely to influence how many Pakistan Muslims view cryptocurrency investment.
Sakib did not say that Osmani changed his mind or stance after the meeting. He called for continuous communication between researchers and regulators as Pakistan develops encryption rules.
Why the fatwa conflicts with Pakistan's encryption push
The Parliament of Pakistan passed the Virtual Assets Act in March 2026. According to relevant reports, PVARA has become a permanent federal regulatory agency with the power to license exchanges, custodians, wallet operators and token issuers. Operating without a license can face fines of up to 50 million Pakistan rupees (approximately US$179,000), plus imprisonment. Licensed companies must also submit their services to the Committee of Islamic Financial Scholars for Shariah compliance approval.
Sakib is betting on the committee structure. A case-by-case review may allow stablecoins or tokenized bonds backed by legal currencies, while rejecting unsupported speculative tokens. This fatwa generalizes USDT with all other tokens, blocking this path. The core of the entire controversy is whether blockchain products can be classified based on the supporters behind them and their functions.
