Pakistan Crypto Regulator Fights to Save Asset-Backed Tokens from Ban

Pakistan's virtual assets regulator has asked the country's most influential Islamic seminary to distinguish between speculative cryptocurrencies and asset-backed digital tokens, after a religious ruling cast doubt on the government's push to formalize crypto trading.

Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority (PVARA), sought guidance from Jamia Darul Uloom Karachi following the seminary's fatwa last month declaring cryptocurrency purchases impermissible under Islamic law. The ruling threatens to stall plans in a nation of more than 240 million people that ranks among the world's largest retail crypto hubs.

The fatwa has exposed internal disagreement. Bloomberg reported that several clerics, including some involved in drafting the ruling, differ on whether certain digital assets could qualify as wealth under Shariah. Some scholars argue that asset-backed tokens or fully reserved stablecoins may be permissible. Others hold that cryptocurrency remains too speculative for lawful trade.

Waqas Ghani, head of research at JS Global Capital, told Reuters that the fatwa could hinder broader, bank-led crypto adoption beyond Pakistan's urban trading community, though trading volumes have not yet been affected.