Pakistan Fatwa Bans Bitcoin in World's No. 3 Crypto Market

Bitcoin News

A senior Pakistani religious authority has issued a fatwa banning the purchase of Bitcoin (BTC) and other digital tokens, injecting fresh regulatory uncertainty into one of the world's largest retail crypto markets. On June 10, the seminary Jamia Darul Uloom Karachi released the religious decree, signed by Mufti Taqi Usmani and other senior scholars. The ruling forbids transactions settled in Bitcoin, stablecoins, and similar assets, describing them as “merely the recording of fictitious numbers in an account.” The verdict lands as the state pushes to position itself as a regional leader in digital assets, exposing a sharp rift between Pakistan's religious establishment and its pro-crypto policymakers. Coverage here reflects our own desk reporting on the Bitcoin policy landscape.

The cleric behind the decree carries unusual weight in Pakistani finance. Mufti Usmani advises Meezan Bank, the country's second-largest lender by market value, on Shariah compliance. In his reading of Islamic law, cryptocurrency does not qualify as maal, or real wealth, and therefore cannot serve as a lawful medium of exchange. That interpretation places the entire asset class, including algorithmic stablecoins, outside the boundary of permissible property for observant investors. The distinction matters because Shariah rulings shape the behavior of millions of retail participants who treat such guidance as binding, not advisory, when deciding whether to hold or spend digital tokens.

Usmani has moved markets with a single ruling before. In 2008, he judged that as much as 85% of outstanding sukuk, the Islamic bond structure, failed core Shariah tests. Global sukuk issuance subsequently collapsed from roughly $50 billion to about $15 billion within a year, though the concurrent financial crisis also weighed on demand. That precedent is why his crypto verdict is being watched so closely. A comparable chilling effect on token purchases across Pakistan's vast retail base could ripple through regional trading volumes, even as the fatwa itself carries moral rather than statutory force.

The scale of the stakes is defined by Pakistan's adoption profile. The country ranks third worldwide for grassroots crypto adoption, trailing only India and the United States, according to widely cited on-chain adoption research. That places tens of millions of users within reach of a ruling that discourages ownership. For a market of that size, a religious ban aimed at everyday transactions could suppress on-ramps and retail flows more effectively than many formal regulations, precisely because it targets individual conscience rather than exchanges or intermediaries directly.

The timing is awkward for a government that has leaned on crypto diplomacy. In January, Pakistan's finance ministry agreed to explore World Liberty Financial's dollar-linked USD1 stablecoin, a project tied to US President Donald Trump, whose reported $1 billion in crypto earnings has drawn scrutiny. Officials have framed the digital-asset agenda as a tool to rebuild economic ties with Washington. The fatwa now complicates that narrative, pitting a state strategy built around stablecoins and foreign partnerships against a domestic religious verdict that rejects the underlying instruments as illegitimate wealth.

Reconciliation efforts are already underway but unresolved. On July 11, PVARA chief Bilal bin Saqib, 35, said he held constructive talks with Mufti Usmani on the Shariah status of digital assets, stressing a shared goal of protecting citizens from fraud and financial harm. Saqib has previously argued that Pakistan's crypto push restored trust with Washington. Yet the two sides remain far from consensus on the core question of whether tokens constitute real property. Until that gap closes, the country's regulatory posture stays split between an ambitious state agenda and an influential clerical rejection.

From our own desk view, price action stayed muted through the policy noise, with Bitcoin near $64,248 and down 1.17% on the day in a sideways regime. COINOTAG's proprietary 42-indicator composite S/R scoring engine rates the $61,768 support at 80/100, driven by the confluence of a Fibonacci 0.114 retracement, a high-volume node, and the Ichimoku Kijun, with a second band at $63,398 scored 76/100 from the point of control and EMA 20. Overhead, the engine grades $67,153 resistance at 76/100 on the Keltner Upper and a flip level. Derivatives read cautiously constructive: funding sits at 0.0028%, open interest near $12.4 billion, and the long/short ratio at 1.55 (60.8% long). Yet a Fear & Greed print of 25 signals extreme fear, and momentum is neutral with RSI at 52.69. A daily close below $61,768 would invalidate the bullish base and open a slide toward $59,526; reclaiming $67,153 is required to negate the near-term bear market risk.