Ondo US Dollar Yield
USDY#204USDY is a tokenized note from Ondo Finance, backed by US Treasury bills, that pays their interest as yield.
Fails our Shariah screening. Needs caution: nature of the asset, excessive uncertainty (gharar), 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 Ondo US Dollar Yield?8 Shariah criteria
2 pass · 3 caution · 3 failThe holder's return is interest: USDY passes the yield of US Treasury bills and bank deposits to token holders.
Riba means interest, or any fixed increase on a loan or on an exchange of money. USDY is a note, that is, a debt the issuer owes to the holder, and its return comes from interest on short-term US Treasury bills, shares of a short-Treasury ETF and bank deposits. The accumulating USDY token rises in price each business day as this interest accrues, and rUSDY adds tokens daily instead; Ondo showed an APY of 3.60% in September 2026. Ondo set the rate at launch as the portfolio's yield minus a spread for fees.
This criterion fails when the holder receives interest from debt instruments, which is exactly the product's design. The OIC's International Islamic Fiqh Academy ruled in 1990 that interest-bearing bonds are prohibited to issue, buy or trade, and that calling the interest 'profit' or 'income' does not change this; applying that ruling to a token is Liberandum's reading.
USDY is a real, collateralized claim, but the claim itself is an interest-bearing debt.
This criterion asks whether the token stands for something of real value. USDY does: it is a note backed by about US$2.29B of assets on 24 September 2026, mostly US Treasury bills, held by a vehicle designed to be bankruptcy-remote, with an over-collateralization cushion and a collateral agent named at launch. It is not an empty record or a scheme that cannot pay. The problem is what the claim is.
A holder owns a debt of the issuer that grows with interest, not a share in a business or in goods, and the SC Malaysia Shariah Advisory Council's 2020 test for digital tokens requires the rights attached to the token to be Shariah-compliant, which an interest-bearing debt claim does not meet on Liberandum's reading. About 9% of the stated collateral is a line labelled 'Ondo Stocks issued USDY', whose nature Ondo's page does not explain. The criterion is therefore at the low end of caution.
USDY is a slow-growing dollar note, not something people bet on.
Maysir means gambling, or gains that depend purely on chance. USDY's price is meant to track the value of its underlying Treasury bills plus accrued interest, so it rises slowly, reaching about US$1.15 in September 2026. It is bought to hold dollars and earn a return, not to profit from price swings, and it has no lottery or betting features. Its problem is interest, assessed above, not speculation.
The issuer's entire business is holding interest-bearing assets and keeping a spread on their interest.
This criterion looks at how the issuer earns. If 5% or more of its income comes from clearly impermissible sources such as interest, the criterion fails. USDY's issuer invests the money it raises in US Treasury bills, a short-Treasury ETF and bank deposits, and at launch Ondo said the rate paid to holders is the portfolio's yield minus spreads for fees and compensation of the first-loss equity. On 24 September 2026 about 91% of the stated collateral was US Treasuries. Practically all of the issuer's income is therefore interest, far above the 5% limit.
Collateral is published and attested daily, but the issuer structure changed in 2025 and part of the collateral is not explained.
Gharar means excessive uncertainty or lack of transparency. USDY is more transparent than most tokens: Ondo publishes a collateral breakdown with maturity and yield, Ankura and StoneX provide daily and monthly attestation reports, and the structure includes over-collateralization and a collateral agent. But the documentation says the original issuer, Ondo USDY LLC, was folded into the Ondo Stocks umbrella on 15 December 2025, without a public explanation of what changed for holders' security.
About 9% of the collateral is labelled 'Ondo Stocks issued USDY' and a small amount still sits in Silicon Valley Bank deposits; the page does not explain the first line, and the stated 122.52% collateralization ratio is higher than total assets divided by value outstanding (about US$2.29B / US$2.07B, roughly 111%), without an explanation of the difference. Redemption depends on the issuer's KYC and eligibility checks. These gaps keep the criterion at caution.
USDY's main purpose is to earn interest on dollars, which is interest-based finance.
This criterion asks what the token is mainly used for. USDY is marketed and used as a yield-bearing dollar: a way for non-US investors, DeFi users and exchanges to hold dollars on a blockchain and earn Treasury-bill interest. Tokenizing permissible assets would pass, but here the tokenized asset is interest-bearing debt, so the main use falls under interest-based finance, a prohibited main purpose. Some use as payment or collateral does not change its core function.
Eligible investors can buy and hold USDY outright, though access is limited by KYC and country rules.
This criterion asks only whether the token can be owned in a normal, fully paid way. Eligible non-US investors can buy USDY from the issuer after identity checks, or on exchanges and DeFi platforms that list it, and keep it in their own wallets on Ethereum, Solana and other networks. It is not only a leveraged or derivative product. Access is narrower than for most tokens: US and Canadian persons and residents of Russia and sanctioned countries are excluded, and in the EU, UK, Malaysia and several other places only professional or wealthy investors may subscribe directly.
USDY gives non-US investors transparent access to dollar savings, but spreads interest-based finance into crypto markets.
Maslahah means weighing public benefit against harm. The benefit is real: USDY offers eligible investors outside the US a transparent, attested way to hold dollars on a blockchain, and it is not associated with fraud or sanctions evasion in the sources reviewed; the SEC closed its investigation into Ondo without charges in December 2025. From a Shariah point of view, though, its core effect is to bring conventional interest income into digital-asset markets and DeFi, where it can be held as a yield-bearing dollar. Neither side clearly dominates, so the criterion is caution.
How you can use it
Tap a card for the ruling and sourcesEligible investors can buy USDY outright, but spot counts as acceptable only for an asset rated HALAL or DOUBTFUL. USDY is rated HARAM because its return is interest, so buying it is not rated acceptable here.
No exchange-traded fund holding USDY was found. A fund holding it would be judged like spot, which fails for this asset.
Paying with USDY means holding and passing on an interest-bearing debt claim that did not pass screening, so it is not rated acceptable.
Not available: USDY is not a proof-of-stake coin, so there is no validation work to be paid for. Products marketed as USDY staking pay returns from lending or the note's own interest.
Always fail: borrowing to trade with leverage, without full delivery.
Always fail: futures, perpetuals and options are deferred exchanges without delivery, often with leverage.
Lending USDY for a return adds a second layer of interest on top of the interest the note already pays.
USDY is itself a yield product: its return is interest on Treasury bills and bank deposits, which is riba.
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.The single biggest Shariah consideration is structural, not incidental: USDY's entire yield is contractually derived from interest on conventional debt instruments, making riba the core, not peripheral, feature of this token.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.Muslims should avoid USDY as its core mechanism of generating and distributing yield through interest-bearing instruments is fundamentally at odds with Shariah principles prohibiting riba.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
2 exchanges from our coverage · no referral links
- BBybitCentralized · USDY/USDTVolume 24h$63.79KReliability7.1Halal productIslamic account
GateCentralized · USDY/USDTVolume 24h$1.03MReliability5.9Halal productNo halal product
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Listings as of Sep 18, 2026
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