Circle USYC
USYC#46USYC is Circle's tokenized money market fund: its price rises with interest earned on US Treasury bills.
Fails our Shariah screening. Needs caution: nature of the asset, permissible ownership, and benefit and harm (maslahah). Fails: interest (riba), business model, and usage.
- 2 pass
- 3 caution
- 3 fail
Verdict history
- Not halalCurrent
First publication
Fundamentals, market picture and news will appear here.
Halal analysis
Can a Muslim hold Circle USYC?8 Shariah criteria
2 pass · 3 caution · 3 failThe holder's entire return is interest from Treasury bills and repo loans, passed on through the token price.
Riba means interest or any guaranteed increase on a loan. USYC's fund holds short-term US Treasury bills (government debt bought at a discount) and reverse repurchase agreements, which are short loans of cash secured by government securities; Circle's docs say it earns the overnight federal funds rate. The token price is the fund's net asset value divided by the supply, and the fund's oracle reports the interest earned at every price update, so the holder's gain is that interest (about 3.8% a year before fees on 25 September 2026).
The OIC Fiqh Academy's resolution on bonds prohibits issuing, buying and trading interest-bearing debt, including when the interest is called 'profit' or 'income'; USYC is a direct application.
USYC is a real claim on a regulated fund, but what the fund owns is almost entirely interest-bearing debt.
Mal is property that Islamic law recognises as having value and that can be owned and traded. USYC is not an empty record: each token is a share in a Cayman Islands fund with real assets, redeemable for USDC at net asset value. But the fund's assets are debts (Treasury bills and repo loans), and trading a claim on interest-bearing debt at a price other than its face value is exactly what the OIC Fiqh Academy prohibits for bonds.
Malaysia's Securities Commission Shariah Advisory Council accepts digital tokens as property only if the money raised is used for Shariah-compliant purposes and the rights attached are compliant; USYC's money goes into interest-bearing instruments and its right is a right to that interest. It therefore stays at the bottom of caution rather than fail only because the claim is real and honoured.
USYC is not a speculative asset: its price only creeps up with interest and it does not trade on exchanges.
Maysir is gambling: winning or losing by chance rather than through productive exchange. USYC has no chance-based payout and almost no price risk: its price follows the fund's net asset value, rising slowly with interest (about $1.138 on 25 September 2026), and it is subscribed and redeemed with the fund rather than traded on exchanges (CoinGecko reported no trading volume on 27 September 2026). It is, however, widely used as collateral for derivatives trading, for example by Binance's institutional clients; that use is weighed under usage and benefit and harm.
All of the fund's income is interest, and Circle's main fee is a 10% cut of that interest.
This criterion asks how the issuer or protocol earns, and whether any of that income is impermissible (the limit is 5% from clearly impermissible sources such as interest). The fund's only business is holding Treasury bills and reverse repo, so essentially 100% of its income is interest. Circle, as token issuer, takes a performance fee of 10% of that yield (about $22,000 on the 25 September 2026 report, against about $250,000 of interest) plus small subscription and redemption fees.
The service providers (prime broker Marex, Customers Bank, administrator NAV Consulting, auditor Cohen and Company) are conventional.
Holdings, supply and price are published daily and the fund is regulated and audited, though Circle controls minting, the allowlist and contract upgrades.
Gharar is excessive uncertainty or hidden information in a deal. USYC is unusually transparent for a token: an on-chain oracle publishes the fund's principal, interest, fee, supply and price at each update; the fund is licensed in the Cayman Islands, the issuer is regulated in Bermuda, and it names its prime broker, bank, administrator and auditor.
The limits are centralised control: Circle mints and burns against subscriptions, only allowlisted wallets can hold the token and all activity can be frozen, the Ethereum contract is an upgradeable proxy upgraded as recently as December 2025, and the fund's audited accounts were not found published. These keep the score at the bottom of pass.
USYC is used to earn interest on idle cash and as interest-bearing collateral for derivatives trading.
This criterion looks at what the asset is actually used for. USYC's stated purpose is to be yield-bearing collateral with near-instant liquidity: institutions park cash in it to earn Treasury and repo interest, and exchanges such as Binance accept it as off-exchange collateral for derivatives trades. Both are interest-based finance, a clear example of an impermissible main purpose. It is not used for payments or to tokenise a permissible asset.
USYC can only be obtained by subscribing to the fund, and only by non-US institutions with $100,000 and KYC.
This criterion asks whether the asset can be owned in a permissible way. Subscriptions are fully paid in USDC and the token sits in the holder's allowlisted wallet, so ownership is real and does not depend on derivatives or leverage. But there is no open spot market: USYC is available only to institutions outside the United States that pass KYC, with a $100,000 minimum, and only allowlisted wallets can hold or transfer it. Access is therefore limited to a narrow route. What is owned remains an interest-bearing fund share, which is judged under riba.
USYC makes cash management faster and safer for institutions, but it spreads interest-based finance on-chain and backs leveraged trading.
Maslahah weighs public benefit against harm. The benefits are real: round-the-clock settlement against USDC, transparent low-risk holdings, and collateral that does not sit idle with an exchange. The harm is that USYC brings conventional interest-bearing instruments into crypto markets and is used mainly as margin collateral for derivatives trading, which feeds leverage. The interest itself is counted under riba, not again here; the balance of benefit and harm is at the low end of caution.
How you can use it
Tap a card for the ruling and sourcesUSYC has no exchange spot market; it is acquired by subscribing to the fund in USDC. Spot is acceptable only for HALAL or DOUBTFUL assets, and buying USYC outright means buying an interest-bearing debt fund.
No listed fund holding USYC was found. USYC is itself a fund of Treasury bills and repo whose income is interest, so a fund holding it would fail the structure check.
USYC is not designed or used as a means of payment; it is a fund share. Handing over USYC as payment would pass on an interest-accruing debt claim, and tier-1 bodies such as Indonesia's MUI also prohibit using crypto as currency.
USYC has no staking and does not secure a network. Its only return is the fund's interest, built into the price.
Margin trading is never acceptable: it is a deferred exchange with borrowed money and leverage (AAOIFI SS 20). This includes posting USYC as margin collateral for leveraged trading.
Futures, perpetuals and options always fail under AAOIFI SS 20: deferred exchange without delivery, usually with leverage. USYC's main use as off-exchange collateral is for exactly such trades.
Lending USYC or lending against it earns interest; the fund underneath already lends cash through reverse repo. This is riba.
USYC is itself a yield product whose return is interest from Treasury bills and repo, net of Circle's 10% fee. There is no permissible yield route.
Scholars quotes
Penggunaan cryptocurrency sebagai mata uang hukumnya haram, karena mengandung gharar (ketidakjelasan), dharar (bahaya) dan bertentangan dengan Undang-Undang nomor 7 tahun 2011 tentang Mata Uang dan Peraturan Bank Indonesia nomor 17 tahun 2015 tentang Kewajiban Penggunaan Rupiah di Wilayah Negara Kesatuan Republik Indonesia.Sebagaimana mata wang yang lain, mata wang digital hendaklah tidak digunakan sebagai bayaran kepada barangan, perkhidmatan dan aktiviti tidak patuh Syariah seperti pembelian dadah, pelacuran, perjudian dan pendanaan aktiviti keganasan serta penggubahan wang haram.If a digital token is backed by ribawi items, the trading of such digital token is subject to the Shariah requirements for trading of ribawi items.Third: In light of the above and given the significant risks associated with this type of currencies and the instability of their transactions, the Council of the Academy recommends pursuing research and studies on issues affecting its ruling.Bitcoin is a digital currency that does not meet the legal and Sharia criteria that make it a currency subject to the rulings of dealing with official legal currencies recognized internationally.بناءً على ذلك: فلا يجوز شرعًا تداول عملة "البتكوين" والتعامل من خلالها بالبيعِ والشراءِ والإجارةِ وغيرها، بل يُمنع من الاشتراكِ فيها؛ لعدمِ اعتبارِها كوسيطٍ مقبولٍ للتبادلِ من الجهاتِ المخُتصَّةِ، ولِمَا تشتمل عليه من الضررِ الناشئ عن الغررِ والجهالةِ والغشِّ في مَصْرِفها ومِعْيارها وقِيمتها، فضلًا عما تؤدي إليه ممارستُها من مخاطرَ عاليةٍ على الأفراد والدول.The bonds which represent a commitment to pay its amount along with an interest related to its nominal value or to a predetermined profit are prohibited in Shariah.Consequently, simply buying and holding the USYC token is Haram, because it represents a direct investment in non-compliant debt.According to research and opinion of experts so far, cryptocurrency is not considered ‘ maal ’ (wealth) in Sharia.Muhammadiyah memandang transaksi dan investasi kripto pada dasarnya mubah (boleh) tetapi dengan syarat tertentu.The opinion on this is the same as doing the same with any halal assets such as shares – 1) is permissible, 2) is more debatable and there are differing opinions on short-term trading.Our current position is 'tawaquf'; we can't say it is halal or haram, but we say it is better not to engage in itAs I mentioned at the beginning of this article it is not necessary to substantiate the permissibility of something as long as there are no prohibited factors involved in it or surrounding it.AI-assisted analysis checked against sources. Not a fatwa or investment advice.
Where it trades
No exchanges from our coverage trade Circle USYC yet
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