Salam,

In June, the Darul Iftaa of Darul Uloom Karachi, one of the most respected fatwa institutions in the Muslim world, issued a ruling signed by nine muftis.

Its conclusion: cryptocurrencies are not Mal, meaning wealth recognised by Shariah. In the fatwa's words, they are entries of fictitious numbers in a ledger.

The consequences are severe. Trading is impermissible. A purchase made with crypto never happened. One questioner was told that the online course he had bought with crypto was not his, and that he should delete the files.

Then something remarkable happened.

At the direction of Mufti Taqi Usmani himself, the same Darul Iftaa invited Mufti Faraz Adam of Amanah Advisors to present the opposing research in its own house. Weeks later, Faraz published the full argument: 124 pages titled "Is Crypto Halal?", reasoning from the same Hanafi sources, quoting Mufti Taqi's own books throughout, and arriving at the opposite conclusion.

So who is right? Wrong first question. The better question is what we do when two serious readings of the same technology point in opposite directions.

Let us be fair to both, because both deserve it.

The Karachi position rests on a classical definition. Mal, in the strict Hanafi reading, is something tangible that people treat as wealth and can store until a time of need. A crypto token, on this view, is none of that: a number on a screen with no existence of its own, its price carried by speculation. That raises Gharar, the excessive uncertainty Islamic law refuses to let contracts stand on. If the thing itself is not wealth, then buying it, selling it and paying with it all fail together.

The reasoning is coherent, and it protects people from a market full of genuine junk.

Faraz's answer does not attack that definition. It relocates the question.

A digital asset, he argues, was never a coin pretending to be tangible. It is a right: an exclusive, protocol-recognised power to control a specific position on a ledger, which only the holder of the private key can exercise. When a right is precisely defined, presently existing, transferable, deliverable and recognised as valuable by common usage, which the jurists call 'Urf, it takes the ruling of Mal Hukmi: constructive wealth, property in the eyes of the law even without a physical body.

The value was never in the string of code, exactly as the value of your Microsoft licence was never in the ink of the certificate.

This debate is not academic, and it is not really about traders in Dubai penthouses.

Take the example the paper itself opens with. A saver in Karachi put aside PKR 10,000 in January 2016, about 95 dollars at the time.

Kept in rupees, that money buys about 36 dollars today. Converted then into a dollar-pegged token, it would still be worth its 95 dollars. Converted into gold, the asset that tokenised products now track, it would be worth roughly 360 dollars: ten times the original amount in rupee terms.

The same is true of remittances. Sending 200 dollars home to Sub-Saharan Africa costs around 8.8 percent through traditional channels, and a fraction of a cent in network fees on chain. Around 1.3 billion adults have no bank account at all, and the largest unbanked populations are in Muslim-majority countries.

This is the sound money question wearing working clothes: whether the people with the weakest currencies may use the tools that preserve what they earn.

Here is the part I most want you to take away. This kind of disagreement is not a malfunction of Islamic scholarship. It is the mechanism itself.

Inside the very school both parties belong to, the pattern repeats for a thousand years. Imam Abu Hanifah held that bees could not be sold; his student Imam Muhammad permitted it once they were contained, because they carry genuine benefit, and the fatwa followed the student.

The jurists of Balkh permitted selling water rights because their people customarily traded them; the jurists of Bukhara refused, fearing uncertainty.

Mufti Taqi Usmani himself extended the status of wealth to trademarks, licences and electricity, precisely because registration, control and custom had changed what people treat as property.

Difference of opinion among qualified scholars, ikhtilaf, is a mercy of this din, not a crack in it.

And notice the manners on display. Karachi did not simply condemn; it invited its strongest critic to present his evidence in its own house, and its researchers say plainly that they are still reviewing the proofs from every side. Faraz did indeed open his paper with praise for the very scholars he disagrees with.

This is peer review, practised seven centuries before the term existed. A tradition that still argues is a tradition that still thinks.

Read both documents closely and something surprising appears: a wide strip of common ground.

Nobody in this debate defends the meme coin whose only utility is the hope that someone will pay more for it tomorrow. Faraz's own framework excludes it: a token with no genuine use fails the test of wealth regardless of its market price.

Even under the permissive view, every single asset must pass screening across three layers: the infrastructure it runs on, the application it serves, and the token itself. Fail one layer, fail the asset.

That matters. The distance between the two opinions is real, but it is narrower than the headlines suggest. One side says: not wealth, therefore nothing passes. The other says: wealth under conditions, therefore some things pass and many still fail.

We are not muftis, you and I. Our job is not to issue the ruling. Our job is to read and understand.

That means three things:

For our work at Swiss Islamic Finance, the posture does not change. We screen before we touch anything, we treat stablecoins as the genuinely hard case, and we would rather move slowly with the scholars than quickly without them.

Honesty requires two cautions.

First, the Karachi review is open, and it may well conclude, on refined evidence, that the prohibition stands. If it does, that conclusion will deserve the same respect as the invitation that preceded it.

Second, the hardest question is barely settled on either side: dollar stablecoins may be claims against an issuer, which drags them under the strict rules governing debt, and Faraz's paper flags this without resolving it asset by asset.

And nothing in this letter is investment advice or a Shariah ruling. It is a map of a debate, drawn so you can walk it yourself.

For years, the conversation about crypto in our communities swung between two lazy poles: haram because it is new, or halal because it goes up. This summer in Karachi, it grew up. The finest minds of a living tradition are now arguing, in public, with evidence, about what wealth actually is in a digital century. Whatever they conclude, we win.

Because a fatwa can be revised. A tradition that stopped thinking cannot.

If you want to read the argument in the scholar's own words rather than my translation of it, it is waiting for you there.

Not a pitch. A door. Walk through it if it serves you.

As always, stay sharp.
Saâd
from Swiss Islamic Finance