Mufti Muhammad Taqi Usmani stated that cryptocurrencies, tokens, and stablecoins do not qualify as wealth or property under Islamic law. The ruling applies to assets including Bitcoin, Ethereum, and Tether (USDT) and has been endorsed by several other scholars.
Pakistani Scholar Bans Cryptocurrency Trading
Cryptocurrency trading is under scrutiny in Pakistan after one of the country's leading Islamic scholars issued a fatwa declaring it impermissible under Islamic law.
The religious ruling was issued by Mufti Muhammad Taqi Usmani and made public by Darul Uloom Karachi, one of Pakistan's most respected Sunni Islamic seminaries. While a fatwa is not legally binding, it can influence how many Muslims approach financial activities, including cryptocurrency trading and investment.
According to the ruling, cryptocurrencies, crypto tokens, and stablecoins do not meet the Islamic definition of wealth or property, which makes their buying and selling prohibited under Shariah. The seminary also stated that different terms like cryptocurrency, virtual currency, token, and stablecoin all refer to the same category of digital assets. This means that changing the terminology does not affect the religious ruling.
As a result, the fatwa applies to major digital assets including Bitcoin, Ethereum, blockchain-based tokens, and stablecoins like Tether (USDT). Darul Uloom Karachi said the ruling has also been endorsed by several other Islamic scholars.
(Source: LinkedIn)
Despite the announcement, Pakistan's government is taking the opposite approach by working to expand and regulate the country's digital asset industry. Authorities have introduced measures aimed at creating a licensed cryptocurrency sector and encouraging blockchain adoption.
Last year, the government announced the creation of the Pakistan Virtual Assets Regulatory Authority, which will oversee the licensing of cryptocurrency exchanges and help integrate blockchain technology into the country's financial system. It has also introduced a regulatory framework for virtual assets that is designed to support the growth of the industry.
Following the fatwa, Pakistan Virtual Assets Regulatory Authority (PVARA) Chairman Bilal Bin Saqib met with Mufti Muhammad Taqi Usmani to discuss the future of digital assets in the country. Saqib said the discussions focused on protecting investors from fraud, but also examined blockchain technology, cryptocurrencies, stablecoins, and tokenized real-world assets from both technical and Shariah perspectives.
Despite the meeting, Mufti Usmani has not withdrawn or amended the fatwa declaring cryptocurrency trading impermissible under Islamic law.
