Mufti Taqi Usmani Declares Cryptocurrency Impermissible Under Shariah But Islamic Scholars Are Not Agreed

Mufti Muhammad Taqi Usmani, president of Wifaq-ul-Madaris Al-Arabia Pakistan and Darul Uloom Karachi, issued a fatwa ruling that the purchase of goods using cryptocurrency, including USDT (Tether) and other crypto tokens, is not permissible under Islamic law. The ruling was confirmed as authentic by his son, Hassan Usmani.

The fatwa’s core argument rests on a specific Shariah concept: maal. Under Islamic jurisprudence, for something to be a valid medium of exchange or subject of a valid transaction, it must qualify as maal, broadly understood as property or wealth that has tangible value and is recognised as such in customary usage. Mufti Usmani’s ruling, based on expert opinions consulted, concludes that cryptocurrency does not meet this standard. It is, in the fatwa’s framing, merely a record of notional numbers in an account, not real wealth in the Shariah sense, and therefore not a valid basis for commercial transactions.

The Specific Case Behind the Ruling

The fatwa was issued in response to a specific query from a member of the public who had purchased two books using cryptocurrency, one with a crypto token and one with USDT, and sought religious guidance on whether these transactions were valid. The questioner also asked about purchasing an educational course from an unauthorised seller who had copied and was reselling content despite the original owner’s prohibition on doing so.

Mufti Usmani’s ruling addressed both elements. The book purchases through cryptocurrency were declared impermissible, with the questioner advised to return the books to the seller. The course purchase was ruled doubly problematic, both because it involved cryptocurrency and because it involved pirated content sold in violation of the original owner’s rights. The questioner was instructed not to derive any benefit from the course and to permanently delete it.

Where the Islamic World Disagrees

The significance of this fatwa is real; Mufti Taqi Usmani is among the most respected Islamic finance scholars alive, and his rulings carry weight that few other scholars can claim. But it is important to note that his position on cryptocurrency, while influential, does not represent a settled consensus across the global Islamic scholarly community.

The debate within Islamic finance circles over cryptocurrency has been active and unresolved for years. Egypt’s Dar al-Ifta, one of the oldest and most authoritative Islamic legal institutions in the world, issued a ruling in 2018 declaring Bitcoin impermissible, citing speculation and lack of intrinsic value. But that position has itself been contested by other scholars in the same tradition.

The UAE, home to a large and sophisticated Islamic finance sector, has taken a notably different regulatory and religious approach. Dubai’s Virtual Assets Regulatory Authority has created a framework that treats crypto as a legitimate asset class, and prominent UAE-based Islamic finance scholars have argued that certain cryptocurrencies, particularly stablecoins like USDT that are pegged to fiat currency, can be considered permissible under Shariah when used in genuine commercial transactions. The argument is that a stablecoin’s value is not speculative in the way Bitcoin’s is and that it functionally resembles a digital representation of an existing currency.

Malaysia’s Securities Commission has also taken a permissive approach to certain crypto assets within a regulated framework, with Malaysian Islamic finance scholars arguing that digital assets can qualify as maal under contemporary interpretations that account for how value and customary usage have evolved in a digital economy.

The crux of the scholarly disagreement lies precisely in the maal question that Mufti Usmani’s fatwa addresses. Those who rule crypto impermissible argue it lacks the intrinsic, tangible value that qualifies something as maal in classical Shariah jurisprudence. Those who permit it argue that maal is determined by customary recognition and social utility, and that millions of people globally recognising and transacting in cryptocurrency is itself evidence of customary value, meeting the standard through a contemporary lens.

Neither position is fringe. Both rest on established Shariah principles applied to a genuinely novel question that classical Islamic jurisprudence could not have anticipated.

The Timing: A Government Caught Between Two Developments

The fatwa arrives at a particularly difficult moment for Pakistan’s government, which is in the process of designing the country’s first cryptocurrency taxation framework for inclusion in Finance Bill 2026-27. That framework is intended to bring Pakistan’s estimated nine million crypto users, the sixth-largest crypto-adopting population in the world, into the formal tax and documentation system.

A major Shariah ruling declaring crypto transactions impermissible does not make that task easier. Pakistan is a country where religious rulings carry significant social weight, and a fatwa from Mufti Taqi Usmani specifically will be taken seriously by a large segment of the population.

What This Means for Pakistani Crypto Users

For Pakistan’s nine million crypto users, the fatwa creates a genuine religious question that each individual must navigate according to their own conscience and religious practice. A fatwa from a scholar of Mufti Usmani’s standing is not legally binding in Pakistan’s civil law system, cryptocurrency transactions are not illegal under Pakistani law, and the government is moving toward regulation rather than prohibition.

But for practicing Muslims who take Shariah compliance seriously in their financial dealings, the ruling demands serious consideration. The specific question of whether USDT, a stablecoin pegged to the US dollar, is impermissible is particularly consequential, as many Pakistani crypto users favour stablecoins precisely because they avoid the volatility of Bitcoin and other speculative assets. Mufti Usmani’s ruling explicitly includes USDT, which closes the escape route that some users might have assumed stablecoins provided.

The Bottom Line

Mufti Taqi Usmani’s cryptocurrency fatwa is a significant religious and social development for Pakistan, but it does not settle a debate that Islamic scholars across the world have not settled either. The maal question at its heart is a genuine jurisprudential challenge: applying centuries-old Shariah principles to an asset class that did not exist when those principles were codified. Reasonable, authoritative scholars have reached different conclusions on the same question. What Pakistan’s crypto users, financial institutions, and government must now navigate is a landscape where one of the most respected voices in Islamic finance has ruled against digital assets — while other Muslim-majority countries with equally serious Islamic finance traditions have ruled or regulated differently. The fatwa does not end Pakistan’s crypto story. It complicates it significantly.