The Pakistan Virtual Assets Regulatory Authority (PVARA) has called for a balanced and informed review of cryptocurrency regulations following a recent fatwa by prominent Islamic scholar Mufti Taqi Usmani. The fatwa, issued in July 2026, declared most cryptocurrencies as impermissible (haram) under Islamic law, citing concerns over speculation, lack of intrinsic value, and potential for illicit use.
PVARA officials emphasized that while religious guidance is important, any regulatory framework must also consider technological innovation, financial inclusion, and economic opportunities. The authority stated that a blanket ban could stifle the development of blockchain technology and digital finance in Pakistan, which has a large unbanked population.
Mufti Usmani's fatwa specifically targeted cryptocurrencies like Bitcoin and Ethereum, but left room for state-backed digital currencies and tokens backed by tangible assets. PVARA has previously been working on a regulatory sandbox for digital assets, and the fatwa has added urgency to the need for clear guidelines.
The debate highlights the tension between traditional Islamic finance principles and emerging digital economies. PVARA has proposed a multi-stakeholder dialogue involving religious scholars, technologists, and financial experts to craft regulations that are both Sharia-compliant and economically viable.
