Cryptocurrency haram or halal, this question keeps millions of Pakistani Muslims up at night as Bitcoin and altcoins flood social media timelines. Now, one of the most authoritative voices in Islamic finance has given a clear answer. Mufti Muhammad Taqi Usmani, head of the Darul Iftaa at Karachi’s Jamia Darul Uloom, has signed a fatwa declaring that trading in cryptocurrency is not permissible under Islamic law. The ruling is not new in its spirit, but it carries fresh weight in 2026 as Pakistan’s young population gets pulled deeper into crypto markets with little guidance on where religion stands.
Why Mufti Taqi Usmani Says Cryptocurrency Haram
Mufti Muhammad Taqi Usmani considers cryptocurrency trading impermissible in its current form because it is dominated by speculation rather than genuine use as money. In his view, currencies are originally a medium of exchange, and making them a tradable commodity for profit earning goes against the philosophy of Islamic economics. He adds that in Shariah there is no valid reason to accept Bitcoin or other cryptocurrencies as a currency, calling it “just an imaginary number” that is generated through a complex mathematical process and is purchased for gambling or speculations, and used in illegal or unlawful transactions.
At the Jamia Darul Uloom of Karachi, a fatwa under the signature of Mufti Muhammad Taqi Usmani has been released in which cryptocurrency has been declared illegitimate in very clear terms. The fatwa specifically calls out stablecoins like USDT as well, arguing that the entire structure is designed to prop up the wider crypto ecosystem rather than serve any genuine economic purpose.
It is worth noting that the scholar’s position has been expressed clearly: Mufti Taqi Usmani, one of the most influential scholars in Islamic finance globally, has stated that cryptocurrency is not permissible in its current state, with concern focusing on the speculative nature of the market and the philosophical problem of treating currencies as commodities to be traded for profit.
The Three Islamic Principles at the Heart of the Debate
The cryptocurrency haram debate in Islamic law circles around three core Shariah concepts that every Muslim investor should understand before putting money into digital assets.
- Riba (interest): Riba covers any unjustified gain from lending or unequal exchange. The Quran addresses it directly: “Allah has permitted trading and forbidden interest.” In practice, any arrangement where you lend crypto and receive more crypto back purely because time passed is off-limits.
- Gharar (excessive uncertainty): Cryptocurrency is not real money, has no intrinsic value, and is not backed by a government, and is primarily used for speculation. The extreme price volatility makes it closer to gambling (maysir) than legitimate investment, and the lack of regulation creates excessive uncertainty (gharar).
- Maysir (gambling): Most scholars agree that using crypto for speculation, buying purely to sell at a higher price, has elements of gambling, while crypto used as a genuine medium of exchange is more likely permissible.
Where Other Major Scholars and Bodies Stand
Mufti Taqi Usmani’s position is firm but not isolated. Other authorities echo similar concerns, though some take a softer line.
Egypt’s Dar al-Ifta issued a fatwa under Grand Mufti Shawki Allam in 2017 prohibiting dealing in Bitcoin, citing excessive uncertainty (gharar) and the absence of a recognised issuing authority. Turkey’s religious authority issued a comparable ruling based on the same grounds.
On the other hand, some scholars are more open. Malaysia’s Securities Commission took a markedly different approach. In July 2020, its Shariah Advisory Council resolved that digital assets are recognised property and that trading them on registered exchanges is permissible, provided the specific tokens satisfy screening requirements.
Indonesia’s fatwa council has permitted crypto trading as a digital asset, provided it has a known benefit. And Mufti Faraz Adam, a leading fintech-focused scholar, argues that crypto can qualify as a legitimate digital asset with real-world utility.
Critically, there is no global consensus from the top standards body. As of July 2026, AAOIFI (the Accounting and Auditing Organization for Islamic Financial Institutions) 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 means Pakistani Muslims are essentially navigating the question scholar by scholar.
What This Fatwa Means for Pakistani Crypto Investors
Pakistan has one of the youngest and most digitally active populations in Asia. Crypto adoption, especially through peer-to-peer platforms, has surged, even while the State Bank of Pakistan has not granted legal status to digital currencies. This creates a double risk for users: a regulatory grey zone and now a religious one.
For Muslims who follow Mufti Taqi Usmani’s school of thought, the ruling is clear: trading cryptocurrency haram means they should exit or avoid crypto markets as they currently operate. However, the ruling does leave a door open. The scholar leaves open the possibility of his view changing in the future, if and when cryptocurrency begins to be used for real trade by real economies. Until then, he cannot see a case for its permissibility based on principle.
For Pakistani fintech users already navigating tools like mobile wallets and digital banking, the SBP Regulatory Sandbox remains a legitimate and Shariah-friendly path for fintech innovation that does not involve speculative crypto trading.
If you want to understand where Pakistan’s financial regulator stands on digital financial services, you can review the State Bank of Pakistan’s official guidance at sbp.org.pk, and for Darul Uloom Karachi’s formal positions, the institution’s official site at Darul Uloom Deoband provides context on the broader scholarly tradition underpinning this fatwa.
Is All Crypto Activity Haram? A Practical Breakdown
There is no single Islamic ruling on cryptocurrency. Three scholarly positions exist: permissible as digital property, conditionally permissible with strict guardrails, and prohibited due to excessive speculation and uncertainty. Here is how different activities tend to be viewed:
- Spot holding (buy and hold): Some scholars permit this if the asset has genuine utility and the holder avoids leverage.
- Day trading / speculation: There is a meaningful jurisprudential distinction between day trading and long-term investing. The former resembles maysir (gambling) more closely; the latter aligns with permissible investment principles, especially if the investor genuinely believes in the asset’s utility.
- Margin and futures trading: Virtually all Islamic scholars who have addressed this agree: margin trading in crypto is haram. Crypto futures, options, and perpetual swap contracts are derivative instruments where the underlying asset may never change hands. These involve selling something you don’t own, excessive speculation, and often interest-linked funding rates, and are widely considered impermissible.
- Staking: Scholars issuing a fatwa on cryptocurrency have consistently stressed that receiving rewards resembling interest, such as staking rewards, goes against the principles of Shariah.
Frequently Asked Questions
Did Mufti Taqi Usmani declare all cryptocurrency haram?
He declared cryptocurrency trading haram in its current form because of its speculative nature. He said currencies should serve as a medium of exchange, not as commodities to trade for profit. He did leave open the possibility of revisiting the ruling if cryptocurrencies become genuinely tied to real economic trade rather than speculation.
Is buying Bitcoin haram for Pakistani Muslims?
According to Mufti Taqi Usmani’s fatwa, buying Bitcoin for speculative trading is not permissible. Some other scholars take a more conditional view and say spot holding for genuine utility can be permissible. Pakistani Muslims are advised to consult a trusted Islamic finance scholar for a ruling based on their specific situation.
Does Pakistan’s government ban cryptocurrency?
The State Bank of Pakistan has not granted legal tender status to any cryptocurrency and has issued warnings against its use. However, there is no outright criminal ban. The SBP’s Regulatory Sandbox supports halal-friendly fintech innovation outside of speculative crypto markets.
What Islamic principles make cryptocurrency risky under Shariah?
The three core concerns are riba (interest-like gains), gharar (excessive uncertainty from extreme price volatility), and maysir (the gambling-like nature of speculative trading). Any crypto activity that involves these elements is likely to be ruled impermissible by scholars who take a cautious position like Mufti Taqi Usmani.
