CoinTelegraph
Pakistan's federal crypto regulator has called for sustained dialogue with the country's top Islamic finance body after a council of Islamic scholars ruled that cryptocurrency cannot be used for payments under Sharia law.
Why it matters
The ruling from the Shariat Appellate Bench of the Council of Islamic Ideology does not criminalise holding or trading crypto, but it closes the door on using digital assets as a medium of exchange in a country where roughly 90% of the population follows Islamic finance principles. For a regulator tasked with drafting Pakistan's first comprehensive virtual asset framework, that distinction is the central policy problem. The regulator wants a single rulebook that lets Pakistan capture fintech investment without alienating the religious establishment whose endorsement retail adoption will depend on.
Market impact
Pakistan ranks among the top ten countries globally by grassroots crypto adoption, with remittance corridors and savings demand driving most of the on-chain volume. Any framework that splits the difference between the scholars' payment ban and the regulator's transactional ambition will shape which corridors survive, which wallet providers can operate legally, and whether Pakistani users default to offshore exchanges that operate outside both rulings.
Frequently asked questions
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Did Pakistan ban cryptocurrency entirely?
No. The Council of Islamic Ideology ruled that crypto cannot be used for payments under Sharia law, but the ruling did not criminalise holding or trading digital assets. The federal crypto regulator has called for dialogue on a broader framework.
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Why is the Sharia ruling significant for Pakistan's crypto market?
Roughly 90% of Pakistan's population follows Islamic finance principles, so a ban on crypto as a medium of exchange effectively forecloses the most visible retail use case even as investment activity remains permissible.
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Who decides whether crypto is Sharia-compliant in Pakistan?
The Council of Islamic Ideology issues religious rulings, while the federal crypto regulator writes the operational rules. The two bodies have publicly diverged, with the regulator calling for ongoing dialogue after the latest ruling.
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How big is crypto adoption in Pakistan?
Pakistan consistently ranks in the top ten countries globally by grassroots crypto adoption, with most on-chain volume tied to remittances and savings demand rather than speculative trading.
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What happens next for Pakistan's crypto framework?
Watch whether the regulator concedes the payment channel entirely or attempts a Sharia-compliant workaround such as asset-backed tokens or commodity-pegged wrappers that preserve transactional use without violating the scholars' ruling.
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