TheBlock
Pakistan's top crypto regulator held talks with prominent Islamic scholar Mufti Taqi Usmani after a fatwa declared purchases made with USDT and other cryptocurrencies impermissible under Islamic finance principles.
Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority (PVARA), argued that stablecoins, tokenized real-world assets and other blockchain-based products should undergo separate technical and Sharia assessments rather than being evaluated under a single framework. The position tries to decouple the financial-engineering review from the religious-compliance review, an arrangement few Western jurisdictions have attempted.
Why it matters
Pakistan is pursuing a sovereign stablecoin, state-asset tokenization and crypto exchange licensing under a regulatory framework that already requires Sharia compliance. A blanket fatwa against USDT-style stablecoins would force every domestic venue to wrestle with whether ringgit-pegged or rupee-pegged tokens clear religious review before they can be listed. The parallel-track approach Saqib floated is effectively a workaround: keep Islamic-finance compliance and technical stablecoin vetting on separate rails, then vet each product twice.
Market impact
The debate matters less for global $BTC or $ETH flows than for the roughly $300M-400M annual crypto remittance corridor into Pakistan, where USDT serves as the working settlement asset. Any restriction that pushed remittance users back to hawala or formal banking rails would shift volume rather than eliminate it. The tokenization side, state land, mining rights and dollar-denominated sovereign paper migrated on-chain, is now explicitly contingent on a Sharia sign-off that has not yet been issued.
Frequently asked questions
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What did Pakistan's crypto fatwa actually say?
A religious ruling declared purchases made with USDT and other cryptocurrencies impermissible under Islamic finance principles. The fatwa triggered talks between PVARA Chairman Bilal bin Saqib and scholar Mufti Taqi Usmani over how to reconcile blockchain products with Sharia law.
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Who is Bilal bin Saqib and what does PVARA do?
Saqib is chairman of the Pakistan Virtual Assets Regulatory Authority, the body overseeing Pakistan's crypto exchange licensing framework. PVARA is also driving the country's push toward a sovereign stablecoin and state-asset tokenization.
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How would parallel Sharia and technical assessments work?
Saqib proposed that stablecoins, tokenized real-world assets and other blockchain products be vetted twice: once for financial-engineering soundness and once for religious compliance. The aim is to keep the two review tracks separate rather than collapsing them into one approval gate.
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Why does this matter for USDT users in Pakistan?
Roughly $300M to $400M in annual crypto remittances flow into Pakistan using USDT as the working settlement asset. A blanket restriction would likely push volume back to hawala networks or formal banking rather than eliminate it.
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Does the fatwa affect Pakistan's sovereign stablecoin plans?
Yes. Pakistan's sovereign stablecoin, state-asset tokenization and exchange licensing all sit inside a framework that already requires Sharia compliance. The state tokenization track is now explicitly contingent on a Sharia sign-off that has not yet been issued.
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