A Respectful Technical Response to Mufti Taqi Usmani on Cryptocurrency, Bitcoin and Islamic Finance

By MinersME Research Team · 18–22 min read

Editorial position. MinersME deeply respects Mufti Muhammad Taqi Usmani and the scholars who signed the recent ruling. This article is not a fatwa and does not claim religious authority. It presents technical, economic and regulatory information that we believe should be considered in any contemporary Shariah analysis of blockchain-based assets.

The reported ruling was dated June 10, 2026 and was signed by Mufti Taqi Usmani and other scholars associated with Darul Ifta, Jamia Darul Uloom Karachi. Because we are working from public reporting and a widely-shared social-media graphic, we attribute arguments carefully: "the ruling and subsequent reporting raise concerns such as…" rather than claiming to reproduce every word of the original document.

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Table of contents

1. What the recent ruling says
2. Why the word "crypto" is too broad
3. Coin versus token
4. Proof of Work
5. Proof of Stake
6. Stablecoins
7. Mining versus trading
8. Response to the sovereign-recognition argument
9. Regulatory recognition in Pakistan and the UAE
10. Response to the gharar argument
11. Response to the maysir argument
12. Response to the intrinsic-value argument
13. Response to the financial-crime argument
14. Response to the volatility argument
15. Areas where MinersME agrees
16. Questions requiring further Shariah research
17. Proposed multidisciplinary research committee
18. Conclusion
19. References
20. Disclaimer

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1. What the recent ruling says

The ruling and subsequent reporting raise a number of serious concerns. Read charitably, the principal concerns include:

• whether cryptocurrency qualifies as mal (recognised wealth) in the classical sense;
• absence of sovereign issuance or recognition;
• excessive uncertainty (gharar);
• speculative trading behaviour;
• resemblance to gambling (maysir);
• lack of tangible or intrinsic value;
• extreme volatility;
• misuse of digital assets in financial crime.

These are serious Shariah concerns. The question is not whether such risks exist — they clearly do. The question is whether they apply equally to Bitcoin, stablecoins, utility tokens, tokenised securities, mining, staking, spot purchases and leveraged derivatives.

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2. Why "cryptocurrency" is too broad

A single label often hides very different products. The table below shows why one ruling can rarely fit every category.

A ruling suitable for a leveraged perpetual contract may not automatically describe physical ASIC mining or spot ownership of a scarce decentralised digital asset.

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3. Coin versus token

• A coin is normally native to its own blockchain — for example, BTC on Bitcoin or ETH on Ethereum.
• A token is normally created on top of an existing blockchain — for example, a token deployed as a smart contract on Ethereum or Solana.
• A token can represent access, governance, ownership, debt, a real-world asset, or in some cases no meaningful right at all.
• The legal and Shariah analysis should examine what the holder actually owns or is entitled to receive — not just the marketing category the token was launched under.

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4. Proof of Work

Bitcoin's Proof of Work (PoW) mechanism is often described inaccurately. A more careful description is:

• Nodes validate transactions and blocks according to consensus rules.
• Miners assemble candidate blocks and repeatedly hash block headers.
• Proof of Work determines which valid block may be appended to the chain.
• The economic cost of hashing makes rewriting confirmed history extremely expensive.
• Miners receive a protocol-defined block subsidy and transaction fees when a valid block is accepted by the network.

Mining requires tangible inputs:

• ASIC hardware
• electricity
• cooling
• networking
• physical facilities
• engineering and maintenance labour
• repairs and replacement parts
• operational risk (uptime, weather, hardware failure, pool risk)

Consumption of real electricity does not, by itself, prove any activity is Halal. It is presented here only as evidence that mining is a productive infrastructure activity — economically distinct from a pure bet on price movement.

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5. Proof of Stake

Proof of Stake (PoS) is fundamentally different from PoW:

• Validators lock ("stake") eligible assets as collateral.
• Validators propose or attest to blocks.
• Rewards and penalties (including "slashing") are protocol-defined.
• Different staking arrangements involve different custody, agency, lending and return structures.

For this reason PoS should not be automatically treated as identical to PoW. Neither MinersME nor this article declares staking Halal or Haram — that is a matter for qualified scholars, transaction by transaction.

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6. Stablecoins

Stablecoins are not all the same. The category includes:

• fiat-reserve-backed stablecoins (e.g. USDT, USDC)
• crypto-collateralised stablecoins (e.g. DAI)
• algorithmic stablecoins (historically the highest-risk category)
• tokenised bank deposits
• central bank digital currencies (CBDCs)

Relevant Shariah and prudential questions include:

• reserve composition and quality
• redemption rights and mechanics
• issuer and custody risk
• transparency and audit
• depegging history
• whether a currency-exchange transaction must satisfy sarf requirements (immediacy, equality where applicable, etc.).

It would be inaccurate to state that every stablecoin is "fully backed" or non-speculative.

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7. Mining versus trading

Not every crypto activity is economically or ethically the same.

MinersME does not argue that every crypto transaction is permissible. Many products in the market raise obvious concerns involving leverage, interest, deception, artificial yield, manipulation or gambling-like behaviour.

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8. Response to the sovereign-recognition argument

Concern: Cryptocurrency is not recognised by a sovereign authority

We acknowledge that Bitcoin is not issued by a sovereign authority and is not legal tender in most jurisdictions.

However:

• Sovereign issuance and legal recognition are different concepts.
• A state can regulate an asset without issuing it — governments regulate gold, foreign currency and equities without issuing them.
• The claim that virtual assets have no sovereign or regulatory recognition anywhere is no longer universally accurate (see the next section).
• Legal recognition does not, by itself, settle whether a particular asset is Halal.
• Regulation can reduce legal ambiguity, but Shariah classification requires a separate analysis.

We deliberately avoid saying "Pakistan legalized crypto." A more accurate phrasing is: Pakistan has established a statutory regulatory framework for virtual assets and Virtual Asset Service Providers.

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9. Regulatory recognition in Pakistan and the UAE

One concern raised in discussions about cryptocurrency is that virtual assets have no recognition from sovereign governments. That statement is no longer universally accurate.

Pakistan has established the Pakistan Virtual Assets Regulatory Authority (PVARA) under the Virtual Assets Act, 2026. PVARA is responsible for licensing, supervising and regulating virtual assets and Virtual Asset Service Providers operating in Pakistan. The law requires VASPs to obtain formal authorisation, while parts of the full licensing framework are still being implemented. For this reason, the accurate wording is that Pakistan has established a statutory regulatory framework for virtual assets, rather than saying that Pakistan has "legalized all cryptocurrency."

The United Arab Emirates also maintains dedicated virtual-asset regulatory frameworks:

• In Dubai, VARA regulates virtual-asset activities across the mainland and free zones, excluding the jurisdiction of the Dubai International Financial Centre (DIFC).
• In Abu Dhabi, ADGM's Financial Services Regulatory Authority (FSRA) operates a separate regulatory framework for virtual assets and other digital-asset activities.

These developments answer the narrow claim that cryptocurrency receives no sovereign or legal recognition anywhere. However, legal recognition and Shariah permissibility remain separate questions. Government regulation does not automatically make every coin, token or transaction Halal. It does, however, change the factual environment that scholars must consider when assessing legal recognition, ownership, consumer protection, custody and market practice.

Key distinction. Regulatory recognition does not automatically establish Shariah permissibility, but it is relevant when evaluating whether virtual assets have any recognised legal status, ownership framework or regulated market structure.

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10. Response to the gharar argument

Concern: Crypto contains excessive gharar

We acknowledge that many tokens and transactions do contain severe uncertainty. Common examples include:

• anonymous or pseudonymous issuers
• unclear ownership and legal rights
• unverifiable reserves
• no redemption rights
• manipulated liquidity
• unaudited smart contracts
• extreme leverage
• misleading promotions

Gharar, however, must be assessed at the level of the asset, contract and transaction — not at the level of the entire industry. Questions worth asking for each transaction include:

• Is the asset delivered to the buyer?
• Does the buyer control it (self-custody or clear qabd)?
• Are the supply rules transparent?
• Is leverage involved?
• Is there a debt relationship?
• Is the issuer identifiable?
• What legal rights exist for the holder?
• Is the underlying use lawful?
• Is the transaction spot or deferred?

Normal market uncertainty is not, by itself, automatically permissible. The above questions help distinguish tolerable commercial uncertainty from the excessive uncertainty that Shariah prohibits.

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11. Response to the maysir argument

Concern: Crypto trading resembles gambling

We agree that certain activities may closely resemble gambling:

• high-leverage perpetual futures
• binary-option-style products
• coordinated pump-and-dump groups
• meme-token betting on short-term price
• trading based solely on short-term chance
• products designed around forced liquidation

These are meaningfully different from:

• operating mining infrastructure
• transferring a digital asset for a genuine payment
• holding an asset without leverage
• using a regulated token for settlement
• running full nodes or developing blockchain software

The existence of gambling-like products inside an industry does not prove that every use of the underlying technology is itself gambling; however, each transaction must still be examined independently.

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12. Response to the intrinsic-value argument

Concern: Cryptocurrency lacks intrinsic or tangible value

The term intrinsic value is contested even in conventional economics. Assets can derive value from a combination of factors, including:

• scarcity
• utility
• enforceable rights
• network acceptance
• production cost
• security
• transferability
• durability
• settlement functionality

For Bitcoin specifically, potential sources of market value include:

• a predictable supply schedule (halving every ~210,000 blocks)
• limited total issuance (21 million cap)
• resistance to unilateral alteration
• global transferability without a central operator
• settlement finality secured by cumulative Proof of Work
• deep global liquidity and adoption

Important qualification. These features may explain why market participants assign value to Bitcoin, but they do not by themselves produce a Shariah ruling. Scholars must still decide whether those features are sufficient for Bitcoin to qualify as recognised wealth (mal), usufruct, currency or another category of property.

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13. Response to the financial-crime argument

Concern: Crypto can facilitate money laundering, fraud and illicit activity

This concern is legitimate and deserves a full acknowledgement:

• pseudonymous addresses do not automatically identify their owners;
• mixers, privacy tools and cross-border services can complicate investigations;
• fraud, theft and rug-pulls remain significant industry risks;
• regulated businesses require KYC, sanctions screening, transaction monitoring and suspicious-activity reporting.

At the same time, many public blockchains maintain permanent, tamper-evident transaction histories, which can assist forensic analysis in ways that cash cannot. We deliberately avoid saying that "blockchain is completely transparent" or that "all transactions are easily traceable" — both are oversimplifications.

Misuse is a legitimate reason for regulation and compliance controls, but the possibility of misuse does not, by itself, classify every lawful use of a technology.

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14. Response to the volatility argument

Concern: Extreme volatility makes cryptocurrency unsuitable as money or a store of value

We agree that volatility is a serious weakness for everyday pricing, wages and short-term savings. At the same time:

• Different assets have different volatility profiles — Bitcoin, a mid-cap altcoin and a fully-backed stablecoin are not the same instrument.
• Suitability as a unit of account is different from permissibility as an owned asset.
• Volatility increases the risk of speculation and consumer harm — a legitimate reason for stronger disclosures, licensing and consumer-protection rules.
• Volatility alone may not answer every question about ownership, transfer or lawful use.

We deliberately avoid using company-stock volatility as a rhetorical trick to bypass the Shariah issue.

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15. Areas where MinersME agrees

Where we agree. MinersME agrees Muslims should be cautious about a wide range of activities in this industry — many of which are structurally problematic regardless of Shariah framing.

Specifically, we agree caution is warranted with:

• leveraged futures and perpetual contracts
• interest-bearing lending products
• guaranteed or unexplained yields
• Ponzi and pyramid schemes
• pump-and-dump tokens
• deceptive token launches
• projects without identifiable utility or clear legal rights
• trading with money needed for basic living expenses
• unlicensed service providers where licensing is legally required
• custody arrangements users do not understand
• treating social-media promotion as investment research

Any credible response to the recent ruling has to concede these points openly — because they are true.

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16. Questions requiring further Shariah research

The following questions deserve dedicated, evidence-based scholarship rather than a single blanket ruling:

1. Can Bitcoin qualify as mal under contemporary customary recognition?
2. Is Bitcoin better analysed as currency, digital commodity, usufruct, network asset, or another property category?
3. What constitutes valid possession (qabd) of a digital asset?
4. Does self-custody differ from an exchange account for the purposes of ownership and delivery?
5. How should the spot exchange of stablecoins be analysed under the rules of sarf?
6. How should mining rewards be classified — as ju'ala, ijara-like output, joint effort or another category?
7. When does staking represent validation income, agency, partnership, lending or another contract?
8. How should tokenised real-world assets be assessed relative to their underlying?
9. Can a decentralised asset with no issuer satisfy the requirements of ownership and liability?
10. Which specific forms of crypto trading cross the line into maysir or excessive gharar?

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17. Proposed multidisciplinary research committee

Given the complexity and speed of technological change, MinersME respectfully proposes that future Shariah studies of digital assets be conducted through multidisciplinary committees rather than single-discipline panels.

Suggested participants:

• senior Shariah scholars
• younger researchers trained in both fiqh and technology
• blockchain protocol engineers
• mining and data-centre engineers
• economists
• accountants and auditors
• cybersecurity and blockchain-forensics specialists
• financial regulators
• AML and sanctions professionals
• legal experts
• consumer-protection specialists

Senior scholarship and contemporary technical expertise are not in competition — they should complement each other. The goal is that any future ruling rests on both a rigorous Shariah foundation and an accurate description of how these systems actually work.

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18. Conclusion

MinersME does not claim that all cryptocurrency is Halal, nor do we dismiss the serious concerns raised by Mufti Muhammad Taqi Usmani and the other scholars who signed the ruling. We respectfully submit that Bitcoin, Proof-of-Work mining, Proof-of-Stake validation, stablecoins, utility tokens, tokenised securities and leveraged speculative contracts are not economically or technically identical.

Pakistan's establishment of PVARA under the Virtual Assets Act, 2026 and the UAE's regulatory frameworks (VARA in Dubai and ADGM's FSRA in Abu Dhabi) also demonstrate that virtual assets are no longer outside every form of sovereign recognition. Regulation does not determine Shariah permissibility, but it changes the factual environment that scholars must assess.

The most constructive path forward is not confrontation. It is continued ijtihad, supported by accurate technical evidence, regulatory understanding, and detailed examination of each asset and transaction.

We invite Islamic scholars, researchers, regulators and blockchain specialists to engage in a respectful, evidence-based discussion.

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19. References

Recent ruling and discussion

• Dawn — reporting on the recent cryptocurrency ruling

Pakistan regulation

• Pakistan Virtual Assets Regulatory Authority (PVARA)
• PVARA — About
• PVARA — Regulations
• PVARA — Licensing
• PVARA — Virtual Asset Services Regulations consultation

UAE regulation

• Dubai Virtual Assets Regulatory Authority (VARA)
• VARA — Rulebook: Regulations
• VARA — 2023 Regulations
• ADGM — Digital Assets

Blockchain technical material

• Bitcoin white paper (Satoshi Nakamoto, 2008)

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20. Disclaimer

This article presents the technical and research perspective of MinersME Cloud Computing Services LLC. It is provided for education and public discussion only. It is not a fatwa, legal advice, financial advice or an invitation to purchase or trade any digital asset. MinersME respects the authority of qualified Islamic scholars and encourages readers to seek personal religious guidance from scholars who have reviewed both the relevant Shariah principles and the technical structure of the specific asset or transaction.

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