Whether cryptocurrency is halal is one of the most asked questions in Islamic finance, and the honest answer is that qualified scholars disagree, with positions shifting as recently as 2026. This article explains what the disagreement is actually about, what major scholars and institutions have said, and where the lines are drawn. It explains positions; it does not issue a religious ruling. For a personal decision, consult a qualified scholar you trust.
Why do scholars disagree about cryptocurrency?
The disagreement comes down to three classical concepts. The first is mal: whether a digital token counts as recognized wealth or property in Islamic law at all. Some scholars argue Bitcoin has real utility and market acceptance, so it qualifies; others argue it lacks the intrinsic backing and stability that wealth requires.
The second is gharar, excessive uncertainty: crypto’s extreme price swings look, to some scholars, closer to speculation or gambling than to legitimate trade. The third is riba, interest: this matters less for simply holding coins and more for crypto lending, staking rewards, and leveraged products, which many scholars treat as interest-bearing arrangements.
What did the June 2026 fatwa actually say?
In June 2026, the Darul Ifta of Jamia Darul Uloom Karachi issued a fatwa signed by Sheikh Muhammad Taqi Usmani, a highly influential scholar and chairman of the AAOIFI Sharia Board. It stated that cryptocurrencies, including tokens and stablecoins, do not qualify as mal, recognized wealth, under Sharia, and therefore that buying, selling, or using them to purchase goods is impermissible. Changing the label to token or stablecoin, the ruling said, does not change the verdict.
Two qualifications matter. First, the fatwa was framed around current evidence and expert assessment, and scholars close to the process have said reconsideration is possible if crypto becomes backed by real assets or endorsed by governments. Second, Pakistan’s Virtual Assets Regulatory Authority responded by asking the seminary for clarification, arguing that speculative coins, gold-backed tokens, stablecoins, and tokenized real-world assets have different characteristics and should not necessarily share one ruling.
Do any respected scholars consider crypto permissible?
Yes. On the other side of the debate, scholars such as Mufti Faraz Adam have argued that cryptocurrencies can qualify as mal when they have genuine utility and market acceptance, and he was even invited to present his research to the Karachi committee before its 2026 ruling. Other scholars permit spot trading of major cryptocurrencies, buying and selling the actual asset without debt or leverage, while drawing the line at leveraged or interest-based products.
This is why blanket statements in either direction mislead. A 2026 Fitch analysis found Sharia views on crypto genuinely mixed across markets, with some prominent scholars considering crypto non-compliant and others deeming it permissible under conditions. Notably, neither AAOIFI nor the Islamic Financial Services Board has issued one comprehensive, crypto-specific ruling that settles the question across jurisdictions, though the IFSB’s IFSB-24 standard does address investor protection for some crypto-assets.
Are stablecoins and asset-backed tokens treated the same?
No, and the distinction is growing in importance
Many scholars and regulators now separate the asset from the label. A gold-backed token or a regulated stablecoin redeemable for fiat raises different questions than a purely speculative coin: the gharar argument weakens when the value is anchored, though questions about the backing arrangement and riba can remain. The June 2026 fatwa treated them alike, but the regulator’s pushback and several scholars’ frameworks treat each asset on its own characteristics.
Market practice reflects this split. Bahrain’s central bank licensed the country’s first stablecoin issuer in June 2026, and several Gulf banks now offer Sharia-compliant crypto brokerage and custody, while other markets hold back. If you want the mechanics of getting started explained plainly, see our beginner’s guide to cryptocurrency apps, but treat the religious question separately from the technical one.
What about staking, lending, and futures?
Here the scholarly consensus is firmer, and more restrictive. Lending crypto for guaranteed interest-like returns raises riba concerns for most scholars. Leveraged futures and margin trading amplify gharar and resemble gambling to many. Conventional options contracts are explicitly impermissible under AAOIFI Shariah Standard No. 20 and the International Islamic Fiqh Academy’s rulings, a point worth remembering as exchanges expand into stock options and derivatives.
A useful principle from Islamic finance educators: do not research only what you are investing in, research how you are investing in it. The contract structure can be impermissible even when the underlying asset might be acceptable. A detailed survey of expert views shows how scholars apply asset-by-asset screening rather than one blanket rule.
What should I do if I am unsure?
Four practical steps. First, learn the positions, which this article covers, so you understand what you are deciding between. Second, consult a qualified scholar whose methodology you trust, ideally one familiar with how the specific product works. Third, whatever your conclusion, avoid leverage, margin, and interest-bearing crypto products, since those draw the strongest scholarly objections. Fourth, if you do participate, treat it as a high-risk portion of your finances, never money you cannot afford to lose.
Our Take
As of 2026, there is no single scholarly consensus: a major 2026 fatwa prohibits crypto as non-mal, other respected scholars permit spot trading under conditions, and global standard-setters have not issued a unifying ruling. The direction of travel is toward asset-by-asset assessment rather than blanket verdicts. Given that reality, an informed Muslim investor studies the positions, follows a trusted scholar, and stays clear of the leveraged and interest-based products that nearly everyone agrees are problematic.
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