Pakistan’s Shariah crypto committee, now formally embedded inside the Pakistan Virtual Assets Regulatory Authority (PVARA), is set to become one of the most consequential bodies in the country’s digital finance history. It will decide which crypto products are halal and which are not, and that decision touches the finances of tens of millions of Pakistanis.
Why the Shariah Crypto Committee Exists
The Virtual Assets Act 2026, passed in March, established PVARA as a permanent federal authority with the power to license virtual asset service providers (VASPs). But lawmakers did not stop there. The law also mandated the creation of a Shariah Advisory Committee, suggesting legislators anticipated exactly this kind of tension between digital finance innovation and Islamic legal principles.
The framework makes Pakistan one of the first countries to formally integrate Islamic finance principles into crypto regulation. The Shariah Advisory Committee within PVARA gives Islamic scholars a formal role in evaluating virtual assets and financial products for religious compliance. Rather than separating regulation from religion, the legislation effectively acknowledges that legal authorisation alone may not be enough in a country where religious rulings can heavily influence financial behaviour.
Firms seeking PVARA licences must also meet minimum capital requirements and ensure their services comply with Sharia law under the guidance of a committee of Islamic finance scholars.
The Fatwa That Shook Pakistan’s Crypto Plans
The committee’s importance became clear almost immediately. A ruling was issued by Darul Ifta at Jamia Darul Uloom Karachi, dated June 10, 2026. Apart from Mufti Usmani, a former judge of the Federal Shariat Court, five other prominent scholars are its signatories.
The ruling is direct in what it says. According to the fatwa, cryptocurrency is not considered “maal” (wealth) in Sharia. Instead, it is merely the recording of fictitious numbers in an account, whether in the form of USDT or other crypto tokens. As cryptocurrency was not recognised as wealth, the fatwa maintained that the buyer did not technically become the owner of goods bought through such transactions.
The scope of the ruling is broad. The fatwa covers cryptocurrencies, crypto tokens, and stablecoins. This means coins like Bitcoin, Ethereum, and widely used stablecoins such as USDT all fall under its scope, at least for now.
After the ruling surfaced, PVARA Chairman Bilal bin Saqib held a “constructive discussion” with Mufti Taqi Usmani on the Shariah status of digital assets. Their meeting came after the fatwa declared purchasing goods with cryptocurrency “impermissible.” Saqib argued that stablecoins, tokenised real-world assets, and other blockchain-based products should undergo separate technical and Sharia assessments.
What Islamic Finance Principles Actually Apply
To understand what the Shariah crypto committee will be judging, it helps to know the three core Islamic finance rules that apply to financial products.
- Riba (interest): Earning or paying interest is forbidden. Crypto products that generate yield by lending or staking coins can fall into this category.
- Gharar (excessive uncertainty): Contracts or trades with too much uncertainty are not allowed. This is one reason scholars who oppose crypto point to its high price swings.
- Maysir (gambling): Speculative activity that resembles gambling is haram. Short-term trading just to guess price moves falls into this territory for many scholars.
Under Shariah, for something to function as a legitimate medium of exchange or store of value, it must qualify as maal, recognised wealth. Digital assets, according to the June ruling, do not clear that bar.
Not all scholars agree. Spot trading of established coins like Bitcoin is viewed as halal by many Islamic scholars, as it involves direct asset ownership without interest (riba). However, speculative practices such as staking, futures, and margin trading are generally regarded as haram. There is no universal ruling, Islamic scholars are genuinely divided.
Globally, the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) is one of the most commonly referenced authorities in Islamic finance. As of July 2026, AAOIFI has not issued a final, binding Shariah standard dedicated to Bitcoin or cryptocurrency. Claims that AAOIFI has declared crypto halal or haram are inaccurate. This gap makes the work of Pakistan’s own Shariah crypto committee even more significant.
What This Means for Pakistan’s 40 Million Crypto Users
Pakistan ranks third globally in the 2025 Chainalysis Global Crypto Adoption Index, with an estimated 40 million users engaged in digital assets as of mid-2026, roughly one in six Pakistanis. For most of them, a ruling from the committee is not just a legal question. It is a religious one.
Pakistan is also moving fast on the financial side. In April, the State Bank of Pakistan permitted licensed virtual asset service providers to open bank accounts. For years, Pakistani crypto businesses had operated in a grey zone, cut off from formal banking infrastructure. You can read more about Pakistan’s broader digital finance shift in our coverage of the SBP’s digital currency pilot and what it means for everyday banking.
The stakes are high. Pakistan has announced plans for a strategic Bitcoin reserve, allocated 2,000 megawatts of surplus electricity for Bitcoin mining and AI data centres, and signed an MoU with an affiliate of World Liberty Financial to explore stablecoin infrastructure for cross-border payments. A broad haram ruling from the Shariah committee would create a direct conflict with all of those plans.
The dispute has direct implications for Pakistan’s developing crypto framework. Parliament passed the Virtual Assets Act in March, making PVARA a permanent federal regulator with powers to license exchanges, custodians, and token issuers. The committee’s job now is to find a path that protects Pakistani users while keeping the door open for a fast-growing industry.
The most likely outcome, based on how similar processes have worked in Malaysia and elsewhere, is a product-by-product approach rather than a blanket ruling. The goal is ensuring that blockchain technologies and digital assets receive proper assessment for Shariah compliance rather than blanket dismissal. That means Bitcoin held as a long-term asset might be treated differently from a leveraged futures contract or a yield-bearing DeFi protocol.
Frequently Asked Questions
What is Pakistan’s Shariah crypto committee?
It is a body of Islamic finance scholars formally created inside PVARA by the Virtual Assets Act 2026. Its job is to review crypto products and decide whether they meet Islamic finance rules. Any firm that wants a PVARA licence must pass this review.
Is Bitcoin halal or haram in Pakistan?
There is no final ruling yet. A June 2026 fatwa from Jamia Darul Uloom Karachi declared crypto transactions haram because digital assets do not qualify as maal (wealth) under Sharia. However, PVARA is pushing for each product to be assessed on its own merits. The Shariah crypto committee is the body that will eventually make this call for licensed platforms in Pakistan.
What is ‘maal’ and why does it matter for crypto?
Maal is the Islamic concept of recognised wealth or property. Under Sharia, only something that qualifies as maal can be legally owned, traded, or used to buy goods. The June 2026 fatwa said crypto does not qualify as maal, which is why it declared crypto-based purchases invalid. This is the central legal test the Shariah committee will apply to each digital asset.
Which crypto activities are most likely to be considered haram?
Across most scholarly positions, futures trading, margin trading, and yield-bearing lending or staking are widely seen as haram because they involve either excessive uncertainty (gharar) or resemble interest (riba). Long-term spot buying of a well-established asset is where scholars disagree most. The Shariah crypto committee’s rulings will clarify this for Pakistan specifically.
