Is crypto haram? Inside the Taqi Usmani fatwa.
A fatwa attributed to Mufti Taqi Usmani and Darul Uloom Karachi holds that trading cryptocurrency is impermissible under Shariah - mainly because crypto is not "wealth" in the classical sense. It lands just as Pakistan moves to regulate the same assets.
In July 2026, Pakistani media reported a fatwa attributed to Mufti Muhammad Taqi Usmani and issued through Jamia Darul Uloom Karachi, ruling that buying, selling and trading cryptocurrencies - including stablecoins such as USDT - is not permissible under Shariah, chiefly because they do not meet the Islamic definition of wealth (maal). The ruling is religious guidance, separate from Pakistan's own move to legally regulate virtual assets through the new PVARA framework in 2025-2026.
- The reported ruling: trading crypto is impermissible, and it covers coins, tokens and stablecoins alike, not just Bitcoin.
- The core reason is technical: crypto is said to fall outside the definition of maal (wealth/property), with speculation (maysir) and uncertainty (gharar) as supporting objections.
- It is not a unanimous view. Serious scholars on the other side argue crypto can qualify as property and may be permissible in halal uses.
- Pakistan is regulating crypto at the same time - which settles its legal status, not its religious one. The two are different questions.
If you save in Pakistan and you have watched friends put money into Bitcoin or USDT, a piece of news in July 2026 probably reached your WhatsApp before it reached the newspapers: Mufti Muhammad Taqi Usmani, arguably the most influential living scholar in Pakistani Islamic finance, is reported to have endorsed a fatwa declaring that trading cryptocurrency is impermissible. This piece explains what the ruling is said to say, the reasoning behind it, why other respected scholars disagree, and - the part that matters for a saver - how to think about it alongside Pakistan's own decision to regulate the very same assets.
One thing up front, because it governs everything below. I am a software engineer, not a mufti and not a financial adviser. Nothing here is a religious ruling or a buy-or-sell call. This is a plain-English summary of a widely reported news event and the centuries-old jurisprudence it draws on, so you can understand the debate and then take the religious question to a scholar you trust.
01What the fatwa actually says
According to Pakistani outlets reporting in early July 2026, the fatwa was issued through Jamia Darul Uloom Karachi - the seminary long associated with the Usmani family - and carries the endorsement of several religious scholars alongside Mufti Taqi Usmani himself. The reported operative ruling is blunt: buying, selling and trading these digital assets is not permissible from a Shariah perspective. Crucially, the reporting stresses that the ruling is not limited to Bitcoin. It is said to extend to all crypto coins and tokens, including stablecoins such as USDT, which are pegged to the US dollar.
This is not a bolt from the blue. Usmani has voiced the same skepticism for years. A line of his from 2018 still circulates widely and captures the flavour of the argument:
"In Shariah, there is no valid reason to accept Bitcoin or other cryptocurrencies as a currency. It is just an imaginary number, generated through a complex mathematical process… purchased for gambling or speculation."
— Remarks attributed to Mufti Muhammad Taqi Usmani, widely quoted since 2018Why does one scholar's opinion carry so much weight? Because of who he is. Mufti Taqi Usmani is a former chairman of the Shariah Board of AAOIFI, the Bahrain-based standard-setter whose rulings shape Islamic finance across the Gulf and beyond. When he speaks on a question of money and contracts, banks and regulators listen. So while a fatwa is, formally, a scholarly opinion rather than binding law, one carrying his name moves the conversation in a way few others can.
A fatwa is an opinion, not a statute. In Islamic law a fatwa is a qualified scholar's considered answer to a question. It guides those who follow that scholar; it is not automatically binding on every Muslim, and other qualified scholars can and do reach different conclusions. Keep that distinction in mind for the rest of this article.
02The reasoning: why "not wealth" is the heart of it
The most interesting thing about this ruling is which argument it leans on. Popular commentary usually attacks crypto on volatility - prices swinging 20% in a day feels like gambling. That is a real objection, but the reported core of this fatwa is more fundamental. It says cryptocurrencies fail the Islamic definition of maal - wealth or property. If something is not maal, it cannot be the valid subject of a sale in the first place, so the question of a "fair" or "unfair" trade never even arises.
To see why that is the sharper claim, it helps to lay out the four concepts scholars actually argue about.
| Concept | What it means | How it applies to crypto |
|---|---|---|
| Maal / mal (wealth) | Something recognised as property that can be lawfully owned and exchanged | The fatwa's central claim: crypto is not maal, so it cannot be validly bought or sold |
| Gharar | Excessive uncertainty or ambiguity in a contract | Extreme price swings and opaque value are argued to make trades excessively uncertain |
| Maysir | Gambling; gaining wealth by pure chance | Buying only in the hope of selling higher is likened to a wager, not real commerce |
| Thamaniyyah | The quality of functioning as money | Prohibitionists say crypto lacks it; the other camp says market use establishes it |
Notice how the objections stack. The primary reported argument is the maal one - crypto is not property in the Shariah sense, full stop. Layered on top are the more familiar complaints: the speculative way most people trade it looks like maysir (gambling), and its wild swings and hard-to-pin-down value create gharar (excessive uncertainty). There is also the point that Pakistan's own new law is explicit that virtual assets are not legal tender - they are not money the state compels anyone to accept - which the prohibition camp reads as reinforcing the "not real money" view.
It is worth being honest about one nuance. In some of his earlier discussions, Usmani reportedly left a door ajar: if a cryptocurrency ever came to be genuinely used for real trade rather than bought and sold for speculation, the analysis might change. The objection, in other words, is aimed heavily at how crypto is used today - as a speculative instrument - not only at what it is in the abstract.
03Not a settled question: the scholars who disagree
Here is the part the headlines usually skip. On cryptocurrency, Muslim scholarship is genuinely divided. Academic surveys of the literature describe two broad camps: total prohibition on one side, and conditional acceptance on the other. This is not a fringe-versus-mainstream split; there are serious, credentialed scholars on both sides.
Crypto is impermissible - it lacks intrinsic value, is dominated by speculation, and carries excessive uncertainty.
- Mufti Taqi Usmani (Pakistan)
- Grand Mufti of Egypt, Shaykh Shawki Allam
- Shaykh Haitham al-Haddad
Crypto can qualify as property and a medium of exchange, so it may be permissible when the underlying use is halal and free of interest and gambling.
- Mufti Faraz Adam (UK)
- Mufti Muhammad Abu Bakar
- Dr Ziyaad Mahomed (leans permissible, with caution)
The permissive camp's argument is not a hand-wave. Scholars such as Mufti Faraz Adam contend that a cryptocurrency can possess taqawwum (legal value), thamaniyyah (money-like function) and tamawwul - the social willingness of a community to treat something as wealth. On this view, wealth does not require physical form or government backing; if enough people accept and transact in a thing, it becomes maal in practice. Others, like Mufti Muhammad Abu Bakar, have argued crypto becomes more clearly permissible once a government formally recognises it - which makes Pakistan's new regulatory framework directly relevant to the fiqh, not just the law. And a common counter to the volatility objection is simple: every currency, including the rupee and the dollar, carries some speculative element, and that alone has never made holding cash haram.
What about a single global authority to settle it? There isn't one. As of mid-2026, AAOIFI has not issued a final, dedicated Shariah standard on Bitcoin or cryptocurrency. So anyone citing a definitive, industry-wide crypto ruling from AAOIFI is overstating the case. That absence is exactly why individual scholars' fatwas - and especially those from a figure as senior as Usmani - fill the vacuum and travel so far.
04Pakistan's paradox: regulated by the state, ruled out by the mufti
The timing is what makes this story genuinely striking. The fatwa arrives in the middle of a complete reversal in how the Pakistani state treats crypto. For most of the last decade, banks were fenced off from it. Now the government is building a licensing regime around it. Here is the arc, with the dates that matter.
So Pakistan now sits in an unusual spot: crypto is moving from banned-in-practice to legal and regulated, while the country's most authoritative Islamic finance scholar says trading it is impermissible. There is no contradiction once you separate the two questions - the state is answering "is it legal?", the mufti is answering "is it permissible?" - but for an ordinary saver the two can blur together fast.
Legality is not permissibility. A government licensing and taxing an activity does not make it halal. Interest-based banking and alcohol are legal and regulated across much of the Muslim world, yet classical fiqh still treats them as impermissible. Read Pakistan's PVARA framework as settling crypto's legal status - not as a religious green light.
05What this means if you're a Pakistani saver
Strip away the noise and, for a practising Muslim saver, the decision tree is short. If you follow Mufti Taqi Usmani's rulings - as a great many Pakistanis do - the guidance here is clear, and you already know what to do with it. If you follow a scholar in the conditional-acceptance camp, you have room, but that room comes with conditions: the underlying use must be halal, and you must avoid interest and outright gambling-style speculation. Either way, the responsible move is the same as with any question of religion: ask the scholar or Shariah board you actually follow, rather than treating a news summary - including this one - as your ruling.
There is also a plain-finance point worth making, separate from the religion entirely. Even setting Shariah aside, crypto is among the most volatile assets an ordinary saver can hold. The same price swings that trigger the gharar objection are the reason many financial educators urge caution regardless of faith. For a household in Pakistan trying to protect savings against inflation, "it might double" and "it might halve" are the same coin.
The good news is that the instruments Pakistanis reach for when they want returns without the Shariah controversy are well established and far less contested:
- Sukuk - government and corporate Islamic bonds structured to avoid interest, backed by real assets.
- Islamic mutual funds and Islamic-window deposits - built on profit-and-loss sharing rather than a guaranteed interest rate. See our guide to investing in mutual funds.
- Physical gold - a tangible asset with a long history as a store of value. We track daily gold rates.
- Shariah-screened equities - shares in companies that pass business-activity and financial-ratio screens.
None of these is automatically "safe", and each still needs its Shariah compliance confirmed against a recognised screening standard or board. But their permissibility is not the live, contested question that crypto's is. For the full landscape, our guide to halal investing in Pakistan walks through Islamic funds, sukuk and Shariah stock screening in detail.
A senior fatwa says crypto trading is impermissible, resting mainly on the argument that crypto is not wealth in the Shariah sense; respected scholars disagree; and Pakistan is regulating crypto in parallel, which answers a legal question, not a religious one. The honest takeaway is not "haram, case closed" or "regulated, so fine" - it is that this is a live scholarly debate. Take the religious question to a scholar you follow, treat crypto's financial risk with the caution any volatile asset deserves, and know that well-established halal alternatives exist. Nothing here is a religious ruling or investment advice.