The question of whether cryptocurrencies comply with Islamic law (Sharia) has once again come into focus in Pakistan. Bilal bin Saqib, who heads the Pakistan Virtual Assets Regulatory Authority (PVARA), made a fundamentally important statement: digital assets cannot be considered a single homogeneous class. Each token or coin must undergo an individual assessment from the perspective of Sharia norms.
This approach is radically different from the simplified interpretations often found in discussions about Islamic finance. Previously, renowned Islamic scholar Mufti Taqi Usmani took a hardline stance, declaring purchases using cryptocurrency, including the stablecoin USDT, impermissible. His argument was based on the fact that he does not recognize digital currencies as property (mal) in the Islamic sense. Mufti Usmani's fatwa caused widespread resonance, but according to available data, its revision was not discussed after a meeting with industry representatives.
The PVARA's position, on the other hand, opens up space for more nuanced regulation. The fact is that the nature of different crypto assets fundamentally varies. Bitcoin, for example, functions as a decentralized payment system and a store of value, whereas USDT is a centralized stablecoin backed by fiat reserves. Tokens from DeFi projects, NFTs, or utility tokens have completely different economic essences. Applying a single Sharia standard to all of them is methodologically incorrect.
My analysis: The PVARA initiative is not just a bureaucratic gesture, but an attempt to adapt centuries-old Islamic financial principles to the realities of the 21st century. If the regulator can develop clear criteria for each class of digital assets, it will open the door for institutional adoption of cryptocurrencies in Islamic countries. However, the key challenge remains: convincing authoritative muftis to reconsider the fundamental question — whether digital property can be considered "property" in the Sharia sense. Without resolving this conceptual dispute, any classifications will remain mere theory.