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Fitch Ratings said regulatory strategies, enabling regulations and in some cases national Sharia rulings are supporting the gradual development of cryptocurrency offerings in Islamic finance in certain jurisdictions. In Malaysia the Securities Commission’s Shariah Advisory Council has declared several cryptocurrencies Sharia-compliant since 2020 including Bitcoin, Ethereum, Ripple and Stellar. The agency noted that Malaysia’s framework has given digital assets a clearer path into the Islamic-finance sector with crypto trading volumes exceeding 4 billion dollars. Bank Negara Malaysia is also testing ringgit stablecoins and tokenized deposits through three initiatives this year according to the assessment.
Dubai’s Virtual Assets Regulatory Authority supervised entities that handled nearly 680 billion dollars in transaction volume during 2025 while assets under management surpassed 2.5 billion dollars Fitch Ratings reported. The UAE’s Higher Shari’ah Authority deemed dealing in Bitcoin permissible in 2025 allowing a small number of conventional and Islamic banks to begin providing cryptocurrency brokerage and custody services. More than 55 virtual-asset service providers had been licensed by September 2026 in that market the ratings agency added. Bank participation remains largely restricted to services for registered operators in many cases.
By contrast Saudi Arabia had not enacted legislation specifically governing cryptocurrencies at the time of the report Fitch Ratings stated. Sharia views on cryptocurrencies are mixed with some prominent scholars considering them non-compliant while others deem them permissible under certain conditions the agency noted. New types of cryptocurrencies continue to emerge with differing views on their Sharia compliance according to the assessment. This has contributed to uneven adoption across Islamic-finance markets.
In Pakistan the Darul Ifta at Jamia Darul Uloom Karachi issued a fatwa stating that cryptocurrencies do not constitute wealth under Shariah Fitch Ratings said. The absence of formal cryptocurrency guidance from the Accounting and Auditing Organization for Islamic Financial Institutions and the Islamic Financial Services Board limits harmonisation across jurisdictions the report found. Divergent religious interpretations also play a role in the uneven progress the agency explained. Fitch expects cryptocurrency products within Islamic finance to continue developing gradually in some jurisdictions but not uniformly.
The Guardian publication on ippmedia.co.tz highlighted that regulation is supporting crypto in select Islamic markets rather than guidance drawing directly from the Fitch analysis. Industry data places Malaysia among the more advanced markets in blending digital assets with Islamic finance principles. Comparable activity in the UAE demonstrates how national rulings can open pathways for bank involvement where regulations align with Sharia standards. The report underscores the importance of tailored approaches in each jurisdiction.
Fitch Ratings assessment found that while some markets have moved toward enabling frameworks others continue to rely on cautious guidance or maintain restrictions. The ratings agency pointed to the lack of common standards as a barrier to broader integration of crypto into Islamic finance. Ongoing evolution in regulatory positions is likely to shape future participation levels across the sector according to the September 16 report.
