Karachi: Pakistan’s virtual assets regulator asked Jamia Darul Uloom Karachi to distinguish speculative cryptocurrencies from asset-backed digital tokens. This came after the seminary rejected crypto payments under Islamic law.
Pakistan Virtual Assets Regulatory Authority Chairman Bilal bin Saqib told Reuters that the regulator was discussing a category-by-category assessment with the seminary.
Jamia Darul Uloom Karachi ruled in June that, in its current form, cryptocurrency did not qualify as recognised wealth under Shariah. Therefore, it could not serve as a valid payment method.
The fatwa followed a question about using cryptocurrency to purchase books and an online course. Scholars issuing the ruling included Islamic finance expert Mufti Muhammad Taqi Usmani.
Saqib said blockchain-recorded sukuk represent ownership in income-generating assets. At the same time, gold-backed tokens and fully reserved stablecoins provide enforceable claims on redeemable assets.
He said blockchain itself was a record-keeping and verification technology rather than a financial asset. Speculative tokens without underlying assets required separate treatment, he added.
Read: Cryptocurrency Fatwa Declares Crypto Trading Impermissible
Waqas Ghani, head of research at JS Global Capital, said the existing ruling could hinder bank-led digital-asset adoption beyond Pakistan’s urban trading community. However, he said trading volumes had not shown a noticeable impact.
The federal government is developing a licensing framework for virtual-asset exchanges. Additionally, it is exploring stablecoins and the tokenisation of real-world and state-owned assets.
Pakistan has also agreed with an affiliate of World Liberty Financial to examine the possible use of its USD1 stablecoin for cross-border payments.
Saqib said Pakistan would continue consulting religious scholars as it develops Shariah-compliant digital finance regulations.
