Pakistan is setting up a Shariah Advisory Board to provide guidance on transactions involving digital and virtual assets, including cryptocurrencies, according to Bilal Bin Saqib, Chairman of the Pakistan Virtual Asset Regulatory Authority. Speaking informally to journalists in Islamabad, Saqib said the proposed board would advise relevant authorities on whether and how digital asset transactions comply with Shariah principles, giving the country’s emerging regulatory framework a formal religious compliance layer alongside its technical and financial oversight functions.
Saqib said consultations on the matter are already underway with Grand Mufti Taqi Usmani, whose input is being sought to help shape how the digital asset framework accounts for Islamic principles. The move comes months after Usmani and a group of other scholars issued a fatwa declaring that purchasing goods with cryptocurrency was not permissible under Shariah, arguing that crypto did not meet the standards required to qualify as wealth under Islamic jurisprudence. Since then, PVARA has held discussions with Usmani on distinguishing between blockchain infrastructure, stablecoins, tokenized real-world assets, and cryptocurrencies, with Saqib arguing that each category represents a different technology and use case that deserves its own technical and religious review rather than a single blanket ruling.
The push to formalize Shariah guidance for digital assets comes as Pakistan works toward a separate but related deadline for its banking sector. Under a 2022 Federal Shariat Court ruling and the 26th Constitutional Amendment, the country is required to eliminate interest-based banking entirely and transition to a fully Shariah-compliant financial system, with a deadline originally set for December 2027 and later extended to January 1, 2028. The State Bank of Pakistan has been overseeing that transition, with commercial banks submitting conversion plans and the government working on legal amendments needed to move the broader financial system toward Shariah-compliant instruments. A Shariah Advisory Board for digital assets would extend that same compliance push into the newer and less regulated space of cryptocurrencies and virtual assets, an area that has grown quickly in Pakistan even as its religious status remained unsettled.
Beyond the Shariah board, Saqib also touched on the cost of digital remittances, saying the current rate stood at around 6.5 percent and could be lowered by roughly one percentage point through digital channels, with savings for Pakistanis estimated at around 410 million dollars annually. He added that PVARA had performed well in its first six months of operation and said Pakistan has the potential to support around 40 million users of digital assets. No timeline was given for when the Shariah Advisory Board would be formally established or begin issuing guidance, and PVARA has not detailed how its recommendations would be applied to licensed exchanges and other virtual asset service providers operating under the country’s existing regulatory framework.
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