Mufti Taqi Usmani, one of the most widely followed Islamic finance scholars in South Asia, has declared that crypto-based purchases are impermissible under Islamic law. The ruling, made at a recent public forum, is significant because Usmani’s opinion carries weight far beyond academic circles — he chairs several Shariah advisory boards at major Pakistani and international financial institutions, and his previous rulings have shaped how Islamic banks structure products in Pakistan, the Gulf, and Southeast Asia.

What exactly did Mufti Taqi Usmani say about crypto?

At a public gathering earlier this week, Usmani stated clearly that using cryptocurrencies to purchase goods and services does not satisfy the requirements of a valid Islamic transaction. The core of his argument, which he has been developing in various forms for several years, is that most cryptocurrencies fail the classical Islamic tests for a valid medium of exchange: they lack intrinsic value, are not backed by a tangible asset, and their value is determined primarily by speculation rather than by the underlying economic activity they are supposed to represent. He has separately expressed more openness to the underlying technology (blockchain) and to tokenised assets that meet specific Shariah criteria, but as a general statement on current crypto-based purchases, the ruling is clear.

Does this mean crypto is illegal in Pakistan?

No, and this is an important distinction. Usmani’s ruling is a religious opinion, not a legal ruling. Pakistan’s federal government has not banned cryptocurrency, and the State Bank of Pakistan has not declared it illegal tender, though it has issued warnings to the public about the risks. The Council of Islamic Ideology, which is the constitutional body that advises the government on whether laws conform to Islamic principles, has not yet issued a binding ruling on cryptocurrency. Until either a federal Shariah ruling or a parliamentary act changes the position, cryptocurrency remains in a legal grey zone: not officially permitted, not officially prohibited, and the subject of ongoing debate among scholars, regulators, and the public.

Who is Mufti Taqi Usmani and why does his opinion matter?

Mufti Taqi Usmani is a Pakistani Islamic scholar and jurist who has held senior positions in Pakistan’s religious establishment and on the Shariah boards of several major Islamic financial institutions, including the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), a key standard-setter for the global Islamic finance industry. He has been deeply involved in the development of Islamic finance products since the 1980s and is one of the few scholars whose opinion is treated as authoritative by both traditional religious institutions and modern Islamic banks. When he speaks on a financial matter, regulators, scholars, and practitioners across multiple countries pay attention.

What are the main arguments against crypto under Islamic law?

The arguments scholars like Usmani have made against cryptocurrency generally fall into three categories. First, the absence of intrinsic value: a dirham or a dollar is a claim on a sovereign or a tangible asset, whereas most cryptocurrencies are pure digital tokens whose value depends entirely on what someone else will pay for them. Second, excessive speculation (gharar): Islamic finance discourages transactions where the outcome is so uncertain that it amounts to gambling rather than a genuine economic exchange. Third, the lack of a regulatory and Shariah-compliant framework for most crypto projects, which makes it difficult to ensure that the underlying activity is itself permissible under Islamic principles.

Are there any Muslim scholars who think crypto is permissible?

Yes, and the debate within the Islamic finance community is not unanimous. Some scholars, particularly in the Gulf and Southeast Asia, have argued that cryptocurrency can be permissible under certain conditions, particularly if it is used as a medium of exchange for legitimate transactions, is backed by tangible assets, or is structured in a way that avoids interest (riba) and excessive speculation. Some Islamic fintech projects have attempted to design Shariah-compliant digital tokens, though most of these are still in early stages. The Council of Islamic Ideology in Pakistan has signalled that it is open to studying the issue further, which is a different posture from a flat ban.

What should Pakistani crypto holders do in light of this ruling?

For most ordinary users, the practical effect of Usmani’s ruling is limited. Crypto holdings are not, on the basis of this opinion alone, going to be confiscated or taxed differently. The ruling matters most for three groups: Islamic finance professionals and Shariah advisers, who use it as guidance for product approvals; Muslim investors who specifically want their investments to be Shariah-compliant and are looking for guidance; and policymakers, who may use it as input into future regulatory frameworks. For everyone else, the most important takeaway is that the debate is ongoing, that no single scholar’s ruling is binding on the whole Muslim community, and that anyone making financial decisions should consult a qualified scholar for guidance specific to their situation.

Is the Pakistan government likely to ban crypto now?

Probably not in the short term, and not on the basis of this ruling alone. Pakistan has historically taken a cautious-but-not-prohibitive approach to crypto, similar to several other developing economies. The Federal Board of Revenue has, in fact, been working on a framework to tax crypto transactions, which is the opposite of a ban. A national ban would require a federal-level policy decision, would face significant pushback from the young, tech-savvy population that has been the most enthusiastic crypto adopter, and would also drive crypto activity underground where it is harder to monitor. Most observers expect Pakistan to continue moving toward regulation rather than prohibition, with this ruling contributing to the conversation but not determining the outcome.

How does this compare to other Muslim-majority countries?

Mixed picture. Saudi Arabia and the UAE have generally taken a permissive approach, with the UAE even hosting one of the world’s most active crypto regulatory regimes. Malaysia has a formal framework that allows crypto trading under Shariah screening. Indonesia has taken a stricter line, with some religious authorities issuing fatwas against crypto use. Pakistan’s position, like most of its regional peers, is in the cautious-regulation camp. Usmani’s ruling adds a clear religious voice to the skeptical side of that debate but does not, on its own, change the regulatory trajectory.

Where can I get more information about crypto and Islamic finance in Pakistan?

The Council of Islamic Ideology publishes its deliberations and rulings on the council’s website, although the formal crypto ruling has not yet been issued. The State Bank of Pakistan has consumer guidance on cryptocurrency on its main website. Several Pakistani Islamic finance scholars, including Usmani, publish regular commentary that is searchable online. For investors, the most important thing is to consult a qualified Shariah adviser before making any decision, particularly given how fast the technology and the regulatory environment are evolving.

For the broader federal digital reform context, our SBP Raast coverage walks through the digital payment rails. For the InvestPak portal as another example of digital reform, our InvestPak coverage is relevant. For the Super App that aggregates federal services, our Pakistan Super App coverage rounds out the picture. For the ChatGPT Work launch as another example of digital technology policy, our ChatGPT Work coverage is useful.

Source: Mufti Taqi Usmani’s public remarks on cryptocurrency, as reported in the Pakistani press.