Pakistan crypto regulator opens dialogue with scholars after Sharia ruling
Pakistan’s virtual-assets regulator, PVARA, is calling for continued dialogue after Islamic scholars issued a ruling restricting crypto payments. PVARA chairman Bilal bin Saqib met prominent scholar Mufti Taqi Usmani, who supported a decision saying purchases made with crypto are not permitted under their interpretation of Islamic law. The regulator said the discussion covered blockchain technology, digital assets, stablecoins and tokenized real-world assets (RWAs), and stressed that different digital-asset categories need “careful technical assessment” plus “rigorous Shariah examination”, rather than a single rule for all tokens.
According to Dawn, Usmani and other scholars signed the legal ruling via Jamia Darul Uloom Karachi. The ruling reportedly argued that crypto, including stablecoins such as USDT, does not qualify as recognized property or wealth. PVARA did not directly challenge the religious claim, but urged regulators and industry participants to keep mapping differences across token types.
The move comes as Pakistan expands from restrictions toward a licensed virtual-asset sector. In April, the State Bank of Pakistan allowed banks to open accounts for PVARA-licensed virtual asset service providers (VASPs) after an eight-year ban. Earlier, Pakistan’s Virtual Assets Act 2026 established PVARA as the statutory oversight body in March.
For traders, the key takeaway is ongoing regulatory-religious uncertainty around stablecoins and “tokenized” use cases, even as licensing frameworks continue to advance.
Neutral
This news is broadly neutral for crypto markets. On one hand, Pakistan’s PVARA is actively engaging with religious scholars and reaffirming a licensing/regulatory path (bank accounts for PVARA-licensed VASPs resumed after an eight-year ban; the Virtual Assets Act 2026 created the regulator). That reduces headline risk for compliant exchanges, custody, and on/off-ramp businesses.
On the other hand, the underlying Sharia ruling reportedly objects to crypto payments and may specifically target stablecoins like USDT by arguing they are not “recognized property/wealth” under that interpretation. Even though PVARA did not directly challenge the ruling, the need for “rigorous Shariah examination” by asset category signals potential delays or stricter requirements for certain token use cases. Historically, when jurisdictions blend regulation with religious or cultural constraints—similar to other countries’ intermittent restrictions—price impact is usually limited unless enforcement becomes explicit and immediate.
Net effect: likely neutral overall. Traders may see short-term volatility in sentiment around stablecoins or markets exposed to Pakistan, but there’s no direct global ban or liquidity shock indicated. Longer term, the dialogue framing suggests a possibility of category-based treatment, which can stabilize expectations if guidance becomes clearer.