Pakistan’s PVARA seeks Shariah dialogue after ruling rejects crypto purchases
The push comes as new licensing and bank-account access for regulated VASPs starts to take effect.
Pakistan’s virtual-assets regulator is urging continued Shariah-focused dialogue after a prominent scholar backed a ruling against purchases made with crypto, including USDT. The timing collides with Pakistan’s rollout of a new licensing regime and newly opened banking access for regulated virtual-asset firms.
Key Takeaways
- A Jamia Darul Uloom Karachi ruling reportedly rejected crypto-based purchases, including transactions using USDT, arguing digital tokens do not qualify as recognized property or wealth under that interpretation.
- PVARA chairman Bilal bin Saqib met Mufti Taqi Usmani and called for continued dialogue on how digital assets should be treated under Islamic law.
- Pakistan’s Virtual Assets Act 2026 established PVARA as the statutory licensing and oversight body for virtual-asset activity.
- The State Bank of Pakistan has allowed banks to open accounts for PVARA-licensed VASPs since April 15, ending an eight-year restriction on regulated institutions dealing with crypto.
Shariah Ruling Rejects Crypto Purchases as Pakistan Builds a Licensed Market
An Islamic legal ruling issued by Jamia Darul Uloom Karachi has injected a high-salience religious constraint into Pakistan’s attempt to formalize a licensed virtual-asset market. The ruling was reportedly signed by Mufti Taqi Usmani and five other scholars and stated that purchases made with crypto, including stablecoins such as USDT, were not permitted because digital tokens did not qualify as recognized property or wealth under their interpretation of Islamic law.
The immediate market relevance is less about spot trading and more about payments and stablecoin rails. A ruling aimed at crypto as a medium of purchase targets the exact “last mile” that turns exchange activity into real-economy usage, and it lands as Pakistan is building the regulatory plumbing to make that usage easier.
Saqib’s Asset-by-Asset Pitch: Stablecoins, RWAs, and Separate Shariah Assessment
PVARA chairman Bilal bin Saqib’s response has been to keep the conversation open rather than confront the ruling head-on. After meeting Usmani, Saqib urged continued dialogue on the treatment of digital assets under Islamic law and framed the issue as one of taxonomy and use-case differentiation.
In a Saturday post, Saqib said the discussion covered blockchain technology, digital assets, stablecoins, tokenized real-world assets (RWAs), and protecting Pakistanis from “fraud, exploitation and financial harm.” He argued that different categories should not be forced into a single permissibility bucket, saying they merit “careful technical assessment alongside rigorous Shariah examination, rather than being viewed through a single lens.”
Saqib made the category split explicit: “I shared that blockchain, digital assets, stablecoins, and tokenized real-world assets represent a broad spectrum of technologies and use cases,” he said. That framing signals where the policy fight could migrate next, toward definitions and permitted applications rather than a blanket yes or no on “crypto.”
Pakistan’s Policy Pivot: Virtual Assets Act 2026 and Bank Accounts for Licensed VASPs
Pakistan’s regulatory posture has shifted quickly from restriction to controlled access. The Virtual Assets Act 2026 passed in March, establishing PVARA as the statutory body responsible for licensing and oversight of virtual-asset activities.
On April 15, the State Bank of Pakistan allowed banks to open accounts for virtual asset service providers (VASPs) licensed by PVARA, ending an eight-year restriction on regulated institutions dealing with crypto. For operators, that is the difference between gray-market workarounds and scalable onshore distribution.
The tension is that infrastructure can be switched on by statute, but adoption is still gated by legitimacy. In Pakistan, where the 2023 census cited 231.7 million people (96.35% of the population) identifying as Muslim, Shariah opinions can function as a practical throttle on merchant and consumer behavior even if licensing and banking rails improve.
Where the Next Signals Could Come From for USDT Rails and Local VASPs
The next signals are likely to come from how Pakistan’s regulator translates “asset-by-asset” into policy language. Any follow-up guidance from PVARA on how stablecoins versus tokenized RWAs will be assessed under Shariah considerations would clarify whether the market is heading toward carve-outs or a more restrictive baseline.
Religious bodies can also move the goalposts. Clarifications from Jamia Darul Uloom Karachi, or other major Pakistani religious institutions, that narrow or expand the scope of the ruling on crypto-based purchases, including stablecoins like USDT, would directly affect payment acceptance risk.
On the market-structure side, licensing decisions matter because they map to bank access under the State Bank of Pakistan’s April 15 policy. New announcements of which VASPs receive PVARA licenses will show how quickly regulated on-ramps can scale.
Finally, watch merchant behavior. Explicit acceptance or rejection of USDT or other crypto for purchases by local businesses would be the cleanest real-economy read-through of whether the ruling is a headline event or a binding constraint.
Regulation Is Opening the Door While Shariah Legitimacy Decides Foot Traffic
Pakistan is building the pipes at the same time it is discovering the bottleneck. Licensing plus bank accounts for PVARA-approved VASPs is a real step toward institutional market access, but the Jamia Darul Uloom Karachi ruling targets the “spend” use case that typically drives stablecoin velocity.
The threshold that matters is whether PVARA can operationalize Saqib’s category framing into a credible taxonomy that religious authorities can engage with, especially around stablecoins versus tokenized RWAs. If that dialogue produces narrow, usable permissions, the setup starts to look structural rather than narrative-driven. If it stays a blanket rejection of crypto as recognized property for purchases, the rails may exist, but foot traffic will remain capped in practical terms.
