Stablecoins Are Not a Single Ruling
No single shariah verdict applies to all stablecoins. Compliance is assessed issue by issue, and the ruling begins with two core questions: what is the coin backed by, and where does its yield - if any - come from? The name and category say nothing about the ruling; the details live in the structure.
Backing: Cash, Debt, or Commodity?
Stablecoins divide by their backing: those backed by cash and short-term debt instruments like USDC and USDT; those backed by commodities such as allocated, redeemable gold; those over-collateralized by crypto; and algorithmic ones with no full backing. The more the backing is a real, defined, deliverable asset, the closer the issue is to compliance.
The Source of Yield: Where Riba Appears
The greater problem is not holding the coin but its yield. If the yield comes from investing the reserve in interest-bearing bonds and debt instruments and is then distributed to holders, it is prohibited riba under AAOIFI standards. Merely using a stablecoin as a means of payment, without seeking yield, is a different matter where the concern eases.
Transparency and the Absence of Gharar
After riba comes gharar: the absence of full disclosure of the reserve, weak redeemability, and the reserve not being subject to independent audit. The 2022 collapse of TerraUSD exposed the fragility of algorithmic models and the excessive speculation and systemic risk they carry. Transparency is a condition, not a bonus.
Why Does Qist Use USDC?
The Qist protocol uses USDC solely as a means of paying installments - not as a source of yield or an investment instrument. The user does not deposit USDC to earn interest; they pay with it the price of a real asset (ETH or cbBTC) that the seller genuinely owns before the sale. Yield in Qist is the profit of a real sale, not interest on money.
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Educational content only - not financial advice.