The new religious ruling on Crypto trading has raised alarms among traders in Pakistan and has opened up conversations in the broader South Asian and Gulf crypto world, including the UAE and Indian crypto investors. Renowned Islamic scholar Mufti Muhammad Taqi Usmani issued a fatwa declaring Crypto trading haram in Islam since digital currencies cannot be termed as wealth or property from a Shariah perspective. The fatwa bans the buying and selling of cryptocurrencies, crypto tokens, and stablecoins. While this fatwa carries no legal weight, it may sway the perception of millions of Muslims regarding Crypto trading and investments as Pakistan moves forward to regulate the virtual asset sector.
According to reports, the fatwa has also been endorsed by several other Islamic scholars, adding weight to the religious opinion. It further states that terms such as cryptocurrency, virtual currency, token and stablecoin all refer to the same category of digital assets, meaning changing the terminology does not change the religious ruling.
Why the Crypto fatwa is creating concern beyond Pakistan
Reportedly, the ruling applies not only to cryptocurrencies such as Bitcoin and Ethereum but also to blockchain-based tokens and stablecoins, including USDT. That has drawn attention from Crypto investors across the region, particularly in the UAE and India, where many traders closely follow developments in Pakistan’s religious and financial circles. Many of whom have dumped their savings due to this fatwa. It has been reported that many investors liquidated their entire holdings.
This fatwa was released by Darul Uloom Karachi, one of the most reputable Sunni Islamic seminaries in Pakistan. Even though it is a religious opinion and not legislation, experts state that it can influence people’s sentiments and investments of Muslims interested in Crypto assets.
Crypto trading and why Pakistan was developing the industry
This fatwa comes at the moment when the Pakistan government is actively involved in regulating and developing the crypto industry in the country. Reports say that last year, the government revealed its intentions of establishing the Pakistan Virtual Assets Regulatory Authority, which would regulate and license cryptocurrency exchanges while implementing the technology in the country’s financial sector.
A regulatory framework of virtual assets was already established by the Pakistani government, which means that a licensed Crypto industry is being developed there.
What are cryptocurrencies and what does the ruling cover?
Crypto-currency refers to digital assets that employ the blockchain network to secure transactional activities. Examples of cryptocurrency are Bitcoin and Ethereum. The fatwa further addresses tokens and stable coins like USDT, claiming that they are similar to digital assets.
The fatwa claims that these forms of assets fail to qualify for Islamic wealth or property. Therefore, their buying and selling becomes impermissible in accordance with Shariah law.
Also Read: India-UK FTA Takes Effect Today: Will Scotch, Luxury Cars And Chocolates Get Cheaper?
Khalid Lateef is a Sub-Editor at NewsX Digital, specializing in Indian politics and global affairs. He also covers viral trending stories and major crime developments.
