Pakistan digital assets review should include both technical and Shariah perspectives, Minister of State for Crypto and Digital Assets Bilal Bin Saqib said after meeting prominent Islamic scholar Mufti Muhammad Taqi Usmani.
The meeting followed Usmani’s recent religious opinion questioning the permissibility of cryptocurrency under Islamic law. His intervention has added a significant religious and regulatory dimension to Pakistan’s fast-moving push to bring virtual assets, blockchain finance and tokenised products into the formal economy.
Saqib said blockchain, digital assets, stablecoins and tokenised real-world assets represented a broad range of technologies and use cases. He argued they should not be viewed through a single lens and should instead be assessed through careful technical analysis alongside rigorous Shariah examination.
Pakistan digital assets review enters sensitive phase
Pakistan digital assets review has entered a sensitive phase because the government is trying to regulate a sector that remains religiously, legally and financially contested.
The discussion between Saqib and Usmani comes as Pakistan moves ahead with the Pakistan Virtual Assets Regulatory Authority, known as PVARA, and draft rules for virtual asset service providers. The regulatory push is intended to bring crypto exchanges, custodians and other digital asset firms under formal supervision.
At the same time, Islamic scholars remain divided on whether cryptocurrencies can meet the requirements of Shariah-compliant wealth, trade and ownership. Usmani’s view carries particular weight because of his influence in Islamic finance and jurisprudence.
That makes the issue more than a technical policy debate. For Pakistan, the success of digital asset regulation may depend partly on whether policymakers can address religious concerns while building safeguards against fraud, speculation and financial misuse.
Bilal Bin Saqib calls for broader assessment
Saqib said his discussion with Usmani was constructive and focused on the Shariah status of digital assets.
He said digital assets should be assessed as a broad category rather than treated as a single product. This distinction is important because the sector includes speculative cryptocurrencies, stablecoins, tokenised financial instruments, blockchain-based settlement systems and tokenised real-world assets.
A blanket approach could ignore differences between these products. Some digital assets may be volatile and speculative, while others may be designed for payments, asset representation, recordkeeping or financial infrastructure.
Saqib said he and Usmani agreed on the need to protect Pakistanis from fraud, exploitation and financial harm. He also called for continued engagement among scholars, regulators and industry experts so Pakistan’s approach could be guided by Islamic principles and a fuller understanding of emerging technologies.
Mufti Taqi Usmani’s objections raise policy challenge
Usmani’s objections have created a policy challenge for Pakistan’s digital asset strategy.
His recent opinion argued that cryptocurrency does not qualify as legitimate wealth under Islamic jurisprudence and therefore cannot be used validly to purchase goods. This position reflects concerns often raised in Islamic finance debates, including uncertainty, speculation, lack of intrinsic value, volatility and potential misuse.
However, the global Shariah debate on digital assets is not settled. Some scholars and Islamic finance experts reject cryptocurrencies as impermissible, while others argue that certain digital assets may be permissible if they avoid prohibited elements such as excessive uncertainty, gambling, deception and interest.
This diversity of opinion means Pakistan may need a more nuanced regulatory and religious review. Policymakers will have to distinguish between risky speculative trading and blockchain-based financial tools that may serve lawful commercial purposes if properly structured.
PVARA central to Pakistan crypto regulation
PVARA is central to Pakistan’s attempt to regulate the digital assets sector.
The authority has released draft Virtual Asset Services Regulations, 2026, for public consultation under the Virtual Assets Act, 2026. The proposed framework is expected to shape licensing, compliance and supervisory requirements for virtual asset service providers.
The draft regulatory process suggests that Pakistan is no longer treating digital assets only as an informal or prohibited activity. Instead, the government is trying to create a supervised structure for businesses that deal with virtual assets.
This marks a significant shift from earlier caution around cryptocurrency. Pakistan’s central bank has also opened formal banking channels for licensed virtual asset service providers, allowing banks to provide accounts to regulated firms while maintaining compliance controls.
For digital asset firms, licensing and access to banking channels are essential. Without them, the sector remains outside formal finance, increasing risks of fraud, money laundering, tax evasion and consumer harm.
Shariah review may shape public acceptance
A credible Shariah review could play an important role in public acceptance of digital assets in Pakistan.
Many Pakistanis are likely to consider the religious status of crypto before investing, trading or using digital financial products. If major scholars reject the sector outright, public trust may weaken even if formal regulation is introduced.
At the same time, regulators cannot rely only on religious debate. They must also address practical risks, including market manipulation, cyber theft, scams, money laundering, terrorism financing, misleading advertising, consumer losses and misuse of customer funds.
A balanced review would therefore need input from Islamic scholars, financial regulators, technologists, economists, lawyers and compliance experts. Such a process could help separate speculative or harmful products from potentially useful blockchain applications.
This approach may also help Pakistan avoid the extremes of either unrestricted crypto promotion or an overly broad rejection of all blockchain-based finance.
Stablecoins and tokenised assets require separate treatment
Stablecoins and tokenised real-world assets may require separate treatment from ordinary cryptocurrency trading.
Stablecoins are usually designed to maintain a stable value by reference to another asset, such as a currency or reserve basket. Tokenised real-world assets represent claims or interests in assets such as bonds, commodities, receivables or other financial instruments.
These products raise different legal and Shariah questions from highly volatile cryptocurrencies. For example, a token linked to a real asset may require analysis of ownership, custody, transferability, underlying asset quality, contractual rights and risk allocation.
If Pakistan wants to develop tokenised finance, it will need clear rules on asset backing, disclosures, custody, investor protection and Shariah governance. Without such rules, tokenisation could become another channel for speculation and mis-selling.
This is why Saqib’s argument for a broader review matters. Digital assets cannot be regulated effectively if all products are placed into one category without examining how they function.
Consumer protection remains major concern
Consumer protection is one of the strongest arguments for regulation.
Crypto-related scams have affected investors around the world, and Pakistan is no exception. Fraudulent trading platforms, fake investment schemes, pump-and-dump activity, impersonation scams and unrealistic profit promises can cause severe losses for ordinary citizens.
A regulated framework can help reduce these risks by requiring licensing, customer due diligence, segregation of customer assets, disclosures, cybersecurity standards and supervision. However, regulation must be enforced effectively to be meaningful.
Religious concerns also overlap with consumer protection. Many objections to cryptocurrency are not only theological but practical. They relate to speculation, uncertainty, deception and harm. A credible regulatory framework would need to address those concerns directly.
Islamic finance expertise could strengthen regulation
Pakistan has an established Islamic finance sector, which could help shape a more credible approach to digital assets.
Islamic banking, sukuk and Shariah-compliant investment products already require scholars and financial experts to assess structures against Islamic principles. A similar governance model may be needed for certain digital asset products if they are to be offered as Shariah-compliant.
This could include Shariah boards, product-level certification, ongoing monitoring, disclosure of risks and clear rules on what types of digital assets can be marketed to the public.
However, Shariah approval should not replace financial regulation. A product may be structured to meet religious requirements but still carry market, operational or cyber risks. The strongest framework would combine Shariah review with prudential oversight, anti-money laundering controls and consumer protection rules.
Pakistan seeks formal digital finance framework
Pakistan’s broader objective is to integrate digital assets into the formal financial system while reducing risks.
The government has moved quickly in recent months to establish institutional structures, consult on regulations and explore blockchain-based financial products. These efforts are linked to a wider ambition to modernise financial services, attract investment and position Pakistan within the global digital finance economy.
However, speed creates risk. If regulation advances faster than public understanding, enforcement capacity and Shariah consensus, the sector could face public mistrust or legal uncertainty.
The meeting between Saqib and Usmani suggests officials understand that religious legitimacy and public confidence matter in Pakistan’s financial system. A purely technical or investment-driven approach may not be enough.
Digital assets debate likely to continue
Pakistan digital assets review is likely to remain a contested issue as the country tries to balance innovation, regulation and Islamic finance principles.
The latest meeting does not resolve the question of whether cryptocurrency is permissible under Shariah. It does, however, show that Pakistan’s crypto leadership is trying to engage religious scholars rather than bypass them.
That engagement may be necessary if the government wants to build a digital asset framework that is both commercially viable and socially acceptable. The challenge will be to ensure that the review is rigorous, transparent and product-specific.
For Pakistan, the stakes are high. A well-regulated digital asset sector could support innovation, formalise activity and improve oversight. A poorly designed framework could expose citizens to fraud, speculation and legal uncertainty.
The next stage will depend on whether regulators, scholars and industry experts can develop a common framework that protects consumers, respects Islamic principles and distinguishes between different uses of blockchain technology.
Until then, Pakistan’s digital asset ambitions will remain tied to a difficult but necessary question: how to regulate emerging financial technologies without ignoring religious, legal and consumer protection concerns.
Published in SouthAsianDesk, July 12, 2026
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