Renowned Islamic scholar Mufti Taqi Usmani has officially declared that the use of cryptocurrency for commercial transactions is impermissible under Islamic law. The ruling, issued through a detailed fatwa, categorizes digital assets as non-compliant with the fundamental principles of Islamic finance.
Mufti Usmani, who serves as the chairman of the Shariah Board at the State Bank of Pakistan, argues that cryptocurrencies lack the intrinsic value required for a medium of exchange. He maintains that digital tokens operate as speculative instruments rather than stable currency, placing them in the category of gambling or *maisir*—which is strictly prohibited in Islam.
The ruling addresses the growing popularity of Bitcoin and other decentralized assets among younger investors in Pakistan. For those seeking to align their financial activities with religious doctrine, the fatwa serves as a definitive barrier. It clarifies that because these assets are not backed by any government or physical commodity, they fail to meet the “standard of value” criteria necessary for legitimate trade.
The scholar’s stance is rooted in the volatility inherent in the crypto market. He highlights that the extreme price fluctuations—often driven by market sentiment rather than economic performance—create a high level of uncertainty, or *gharar*, which is also forbidden in Islamic contract law.
While the fatwa focuses on the religious permissibility of transactions, it echoes concerns raised by financial regulators globally. Central banks in various jurisdictions have repeatedly flagged the lack of consumer protection and the susceptibility of crypto platforms to illicit activities, such as money laundering and capital flight.
Despite the ruling, the debate surrounding digital assets continues to intensify in Pakistan. While some local tech advocates argue that blockchain technology offers a pathway for financial inclusion, Mufti Usmani’s intervention shifts the focus back to the ethical framework of the country’s existing banking system.
For investors, the message is clear: according to this interpretation of Sharia, the path to wealth through digital speculation is not only financially risky but religiously prohibited. The fatwa leaves little room for ambiguity, effectively closing the door on the integration of decentralized finance into the mainstream Islamic economic landscape.
