Pakistan seeks cryptocurrency dialogue after scholars reject USDT payment

Chairman of Pakistan's virtual asset regulator calls for continued discussions on digital assets under the framework of Islamic law Bilal bin Saqib, Chairman of the Virtual Asset Regulatory Authority of Pakistan (PVARA), called for continued discussions on digital assets under the framework of Islamic law. He made the statement after meeting with scholar Mufti Taki Osmani on July 11. Saqib said both sides shared a common goal: to protect Pakistan from fraud, exploitation and financial loss. Abstract The head of cryptocurrency regulation in Pakistan seeks separate reviews of different digital assets at the technical and Shariah levels rather than issuing a general ruling. Mufti Taki Osmani's ruling rejected cryptocurrency purchases, claiming that the tokens did not have wealth attributes recognized by Islamic law. While Pakistan is promoting the licensing of cryptocurrency companies, religious considerations have added new dimensions to its regulatory system. Saqib said in a public statement that blockchain, stablecoins, tokenized real-world assets and other digital assets cover different technologies and uses. He believes these assets need to be "supplemented by careful technical evaluation in addition to strict Shariah review" rather than generalizations. He also called for further dialogue among scholars, regulators and industry experts. Religious ruling rejects cryptocurrency trading The meeting followed an Islamic legal ruling issued by the Darrul Ifta Islamic Law School in Karachi. Mufti Osmani and five other scholars signed the ruling on June 10, 2026, finding that purchases using cryptocurrencies (including USDT) are not allowed under their interpretation of Islamic law. According to Dawn, these scholars believe that existing research does not recognize cryptocurrencies as a recognized form of property or wealth. The ruling described it as "just a record of imaginary numbers in an account." Saqib did not directly deny this conclusion, but instead called for separate reviews of different types of digital assets. Pakistan continues to promote the construction of a licensed cryptocurrency market. This exchange comes as Pakistan promotes the standardization of the virtual asset industry. The 2026 Virtual Assets Law established PVARA, which is responsible for the licensing and supervision of virtual asset service providers. PVARA has also launched a public consultation on rules covering exchanges, custodians, brokers, token issuers and other service providers. On April 15, the State Bank of Pakistan allowed commercial banks to open accounts for companies that have obtained PVARA licenses. The central bank's notice requires banks to verify licenses, conduct due diligence, monitor accounts, and separate customer funds from company funds. Banks are not allowed to use their own capital or customer deposits to trade or hold virtual assets. A previous report showed that the policy ended eight-year restrictions on banking services by regulated cryptocurrency companies. The report pointed out that banks still need to comply with foreign exchange, anti-money laundering and counter-terrorism financing regulations, and suspicious activities must be reported to the Pakistan Financial Supervisory Authority. Stable coins and tokenization remain an integral part of policy planning. Pakistan has also explored stable coins and tokenized assets through cooperation with international companies. In December 2025, the government and Binance signed a non-binding agreement to study the tokenization of up to US$2 billion in national assets. The plan involves government bonds, treasury bills and commodity reserves. Another agreement in January 2026 involved studying the use of USD1 stablecoins in cross-border payments. Relevant work will involve the Ministry of Finance and the Central Bank of Pakistan. These projects still require regulatory, technical review and formal approval. The cryptocurrency payment controversy has now added a religious censorship dimension to Pakistan's regulatory process. PVARA has not announced any changes to license rules after the meeting. Saqib's statement left room for discussion while regulators continued to draft operating standards. The ruling did not change the national licensing rules, and licensed companies still need to comply with the Virtual Assets Law and central bank regulations.