Pakistan's top crypto regulator is pushing for a nuanced Islamic ruling on digital assets, urging religious scholars to distinguish between speculative cryptocurrencies and asset-backed tokens. The move follows a fatwa that declared all crypto-based purchases impermissible under Islamic law, threatening the government's ambitious plans for digital finance. Main Developments Bilal bin Saqib, chairman of the Pakistan Virtual Assets Regulatory Authority (PVARA), has formally asked Jamia Darul Uloom to reassess digital assets by category rather than treating them as a single class. The request comes after the seminary issued a fatwa on June 10, declaring cryptocurrency impermissible for purchasing goods, describing it as "merely the recording of fictitious numbers in an account." Read also: ADB Appointed Adviser for Islamabad Airport Outsourcing Deal Saqib emphasized that blockchain-recorded sukuk, gold-backed tokens, and fully reserved stablecoins represent ownership of real, income-generating assets—distinct from purely speculative tokens with no underlying value. "The central question the fatwa raises is whether a digital asset constitutes recognized wealth under Shariah," he said. "That is precisely the right question, and it is why these instruments must be examined individually." Background Mufti Taqi Usmani and six other scholars issued the fatwa on June 10, casting doubt on Pakistan's rapid embrace of cryptocurrency. The country has long ranked among the world's largest crypto markets by retail activity, making the religious ruling significant for both local traders and the government's digital finance ambitions. Last week, Saqib held what he described as a "constructive discussion" with Mufti Usmani, explaining that "blockchain, digital assets, stablecoins, and tokenized real-world assets represent a broad spectrum of technologies and use cases." The PVARA chairman stressed that blockchain itself is "a record-keeping and verification technology, not a financial asset." Why It Matters The fatwa, if left unchallenged, could become "a hurdle to broader, bank-led crypto adoption beyond Pakistan's urban trading community," said Waqas Ghani, head of research at JS Global Capital. So far, however, crypto trading volumes have appeared unaffected, he noted. The outcome of these discussions will shape Pakistan's regulatory framework and its bid to become a leader in Shariah-compliant digital finance. What's Next PVARA will continue working with scholars as Pakistan develops its licensing framework and advances work on stablecoins and real-world asset tokenization. "Pakistan has the opportunity to lead the world in Shariah-compliant digital finance, and that leadership must be built with our scholars," Saqib said. The seminary's response to the request for categorical distinction remains pending.