Pakistan's attempt to bring crypto into its banking system has run into an unexpected problem as one of the Muslim world's most influential seminaries says crypto, including Tether's USDT stablecoin, doesn't count as wealth under Islamic law.
- The dispute began with a question on whether someone could use crypto to buy books and an online course.
- But in a ruling dated June 10, Jamia Darul Uloom Karachi, an influential Islamic seminary in Pakistan, said the purchase wasn't permitted because cryptocurrencies aren't recognized as maal, or wealth, under Islamic law.
- The ruling was signed by six scholars, including Mufti Muhammad Taqi Usmani, a former judge on Pakistan's Federal Shariat Court and one of the world's best-known authorities on Islamic finance.
The fatwa, which is a formal Islamic legal opinion, described crypto as "merely the recording of fictitious numbers in an account," specifically mentioning USDT alongside other tokens, writes Dawn, Pakistan's oldest English-language newspaper.
Now Pakistan's crypto regulator wants the seminary to take another look.
Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority, told Reuters that cryptocurrencies should be considered individually instead of being treated as one class.
Bilal bin Saqib
- Saqib argued that a tokenized sukuk, an Islamic bond backed by an income-producing asset, is fundamentally different from a token created purely for speculation.
- Gold-backed tokens and fully reserved stablecoins also give holders a claim on something that can be redeemed, he said.
Pakistan already has one of the world's largest crypto markets
The disagreement comes after Pakistan spent more than a year moving crypto from a legal gray area into its financial system.
Chainalysis and TRM Labs, two blockchain analytics firms that use different methods to measure adoption, both ranked Pakistan third globally in 2025, behind India and the United States.
- TRM Labs also found that crypto transaction volume across South Asia grew 80% year over year to about $300 billion between January and July 2025.
On the legislation front, Pakistan even passed its first comprehensive crypto law in March, giving its crypto regulator the power to license and supervise exchanges.
Crypto exchanges Binance and HTX received initial clearances to establish local companies and pursue full exchange licenses in late 2025.
- On top of that, Pakistan has also signed an agreement allowing Binance to explore turning as much as $2 billion of government bonds, treasury bills and commodity reserves into blockchain-based tokens.
In January, Islamabad, the capital city of Pakistan, struck a separate deal with SC Financial Technologies, an affiliate of the Trump family's World Liberty Financial, to explore using its USD1 stablecoin for international payments and remittances.
But those plans depend on the distinction Saqib is now asking Islamic scholars to make.