USD Coin (USDC) - Generally Not Permissible
USD Coin (USDC) is classified as "Generally Not Permissible" based on scholarly analysis of its underlying technology, use case, and compliance with Islamic financial principles.
Shariah Assessment
Similar to USDT, USDC reserves include US Treasury securities and other interest-bearing instruments. Circle (the issuer) generates yield from these reserves. The token is essentially a claim on a pool of conventional financial assets that include riba-based instruments.
Short-term holding for transaction purposes may be viewed more leniently by some scholars than long-term holding as a store of value.
Scholarly References
- Same scholarly concerns as USDT regarding reserve composition
Last reviewed: December 1, 2024
Frequently Asked Questions
Is USD Coin (USDC) halal to invest in?
According to scholarly analysis, USD Coin (USDC) is classified as "Generally Not Permissible". Similar to USDT, USDC reserves include US Treasury securities and other interest-bearing instruments. Circle (the issuer) generates yield from these reserves. The token is essentially a claim on a pool of conventional financial assets that include riba-based instruments.
What do scholars say about investing in USD Coin?
Key scholarly references include: Same scholarly concerns as USDT regarding reserve composition. Short-term holding for transaction purposes may be viewed more leniently by some scholars than long-term holding as a store of value.
Is cryptocurrency investing halal in Islam?
Cryptocurrency investing is a topic of scholarly debate. Some scholars permit it as a form of digital property, while others express concerns about speculation (gharar). The permissibility often depends on the specific cryptocurrency's use case, backing, and whether it involves prohibited elements.
Do I need to pay Zakat on USD Coin?
If you hold USD Coin as an investment and your total holdings exceed the Nisab threshold, Zakat is generally due at 2.5% of the market value. Use Mizaan's Zakat calculator to compute your obligation based on your specific madhab.