USDC
USDC#6The second-largest US dollar stablecoin, issued by Circle to stay worth US$1, backed by a BlackRock-managed Treasury fund and bank cash.
- Market cap
- $74.38B
- Volume 24h
- $10.34B
- All-time high
- $1.04
- −4.12% from ATH
- Circulating supply
- 75.16B
USDC is rated DOUBTFUL, with an overall score of 56 out of 100 on the eight Shariah criteria. The main point of dispute is interest around the token, not in it. Circle earns about 95% of its revenue from interest on the Treasuries, repo agreements and bank cash behind USDC, so the business model criterion fails. Holders get none of that from Circle: the USDC terms exclude it and US law bars issuers from paying it. But Circle shares much of the interest with distributors, and Coinbase uses it to pay opt-in rewards of about 4% a year to users who keep USDC on its platform, so the interest criterion is caution, and those reward programmes fail. Otherwise USDC is strong: its reserves sit mainly in a BlackRock-managed government money market fund, are checked monthly by a Big Four firm, and it is authorised under MiCA in the EU. It briefly lost its peg in March 2023, when US$3.3B of reserves was caught at Silicon Valley Bank. Scholars disagree: Sharlife and ShariaQuant rate USDC compliant because holders have no right to the reserve interest, while state fatwa bodies in Egypt, Indonesia, Turkey and the UAE reject cryptocurrency in general. Spot purchase is acceptable for a DOUBTFUL asset; rewards, margin, derivatives, lending and yield products fail. This is analysis against Shariah screening criteria, not a fatwa.
- 5 pass
- 2 caution
- 1 fail
Verdict history
- DoubtfulCurrent
First publication
Fundamentals, market picture and news will appear here.
Halal analysis
Can a Muslim hold USDC?8 Shariah criteria
5 pass · 2 caution · 1 failCircle pays holders no interest, but partners such as Coinbase pay opt-in rewards on USDC balances out of reserve income shared with them.
Riba means interest, or any fixed increase on a loan or on an exchange of money. The USDC Terms say Circle may hold reserves in interest-bearing instruments and that holders are not entitled to any interest or other returns on them; redemption is one dollar per token. The US GENIUS Act also bars payment stablecoin issuers from paying holders interest or yield just for holding. So the token itself pays nothing.
The difficulty is its distribution: Circle passes a large part of its reserve interest to partners (US$410M of distribution and transaction costs in Q2 2026), chiefly Coinbase, and Coinbase pays paid members about 4% a year in USDC rewards simply for keeping USDC on its platform. Those rewards are opt-in and paid by the partner, not built into the token, but they are a fixed return on holding a money-like claim funded ultimately by interest. For that reason this criterion is caution rather than pass; the reward programmes themselves are assessed as failing under trading mechanisms. If USDC is treated as money, as in the SC Malaysia classification on Liberandum's reading, exchanging it also follows the rules of currency exchange (bay' al-sarf).
USDC is a redeemable claim on a large, regulated and regularly checked reserve, but authorities disagree on whether crypto tokens count as property (mal).
Each USDC is a claim on Circle, which commits to redeem it for one dollar. Most of the reserve sits in the Circle Reserve Fund, a BlackRock-managed government money market fund (US$61.9B at 30 June 2026, against US$73.3B of USDC), with the rest in bank cash, and a Big Four firm confirms every month that reserves exceed the tokens in circulation. The claim has been tested: in March 2023 USDC fell to US$0.87 when US$3.3B of reserves was caught at Silicon Valley Bank, and it recovered within days. Direct redemption is limited to Circle Mint business accounts; ordinary holders sell on exchanges.
On property (mal), Malaysia's SC Shariah Advisory Council recognises digital currencies and tokens as mal and classes currency-backed ones as currency, within its jurisdiction; applying this to USDC is Liberandum's reading. A June 2026 fatwa from Darul Uloom Karachi says crypto tokens are not mal, and state fatwa bodies in Egypt, the UAE, Indonesia and Turkey rejected cryptocurrency in general. Because recognised bodies disagree, this criterion is caution rather than pass.
USDC is built to stay at US$1, not to be bet on.
Maysir means gambling, or gains that depend purely on chance; ordinary price movement is not maysir. Over the year to 27 September 2026 USDC traded between US$0.9987 and US$1.0024, so it is not held to profit from price swings. It is used to move and settle dollars: Circle reported US$14.8T of on-chain USDC transactions in Q2 2026. USDC is also used as collateral for leveraged trading and in decentralised finance, but those are features of the trading products, assessed separately, not gambling mechanics of the token.
About 95% of Circle's revenue is interest earned on USDC reserves, far above the 5% limit on impermissible income. This is the main point of dispute.
This criterion looks at how the company behind a token earns. If 5% or more of its income comes from clearly impermissible sources such as interest, the criterion fails. It carries 15% of the overall score: a failure lowers the score but does not by itself make the asset HARAM. Circle's own filings are clear: in Q2 2026 reserve income was US$667.7M of US$701M total revenue and reserve income, about 95%, earned at a reserve return rate of 3.5% on Treasuries, repo agreements and bank cash.
Circle then paid US$410M in distribution and transaction costs, mostly sharing that interest with partners; under its agreement Coinbase receives half of the residual income from USDC in the wider market. The counter-view is serious: holders receive none of Circle's interest, and Sharlife and ShariaQuant rate USDC compliant for that reason. The test still applies to the issuer's income, because the reserve behind every token is run to earn interest.
- Circle Reports Second Quarter 2026 Results (Form 8-K, exhibit 99.1, SEC EDGAR)
- Circle Internet Group, Inc. Form 10-Q for the quarter ended 30 June 2026 (SEC EDGAR)
- Circle Internet Group, Inc. Form 10-K for fiscal year 2025 (SEC EDGAR)
- Is USDC (USD Coin) Halal? Circle's Stablecoin Shariah Analysis (Sharlife)
Reserves are held in a regulated fund with daily public reporting and monthly independent checks, though Circle can freeze tokens and some reserves are bank cash.
Gharar means excessive uncertainty or lack of transparency in a deal. USDC's reserves are unusually transparent for a stablecoin: most sit in a SEC-registered government money market fund managed by BlackRock, whose portfolio is reported daily, a Big Four firm gives monthly assurance that reserves exceed tokens in circulation, and Circle's accounts are audited by Deloitte and filed with the SEC. The reserve assets are cash, short-dated Treasuries and overnight Treasury repo, with no gold, bitcoin or loans.
Remaining risks are real but limited: the rest of the reserve is cash at a few large banks, which is how US$3.3B was caught at Silicon Valley Bank in 2023; Circle can freeze addresses at its discretion; and the token contract is upgradeable by Circle. These are disclosed, so this is a low pass.
USDC is used mainly to hold, move and settle dollars; a notable part also sits in interest-bearing lending and reward products.
USDC's main uses are permissible in themselves: transfers, payments, settlement of spot trades and dollar balances in crypto applications. Circle reported US$14.8T of on-chain transactions in Q2 2026. USDC is also widely lent for interest: on 27 September 2026 DefiLlama showed about US$2.9B supplied to Maple at about 5.2% a year, with Aave and Spark paying about 3.6%, and it is held on Coinbase to earn rewards. No source measures what share of all USDC is in such products, so this is a low pass and the gap is recorded.
USDC can be bought outright and held in full, on exchanges or through Circle.
This criterion asks only whether the token can be owned in a normal, fully paid way. USDC is widely available for spot purchase, is authorised under MiCA in the EU, and business customers can mint and redeem it directly with Circle at US$1. Holders can keep it in their own wallets on Ethereum, Solana and many other networks. It does not exist only as a leveraged or derivative product.
USDC gives cheap, fast dollar access under regulatory supervision; misuse exists but does not dominate.
Maslahah means weighing public benefit against harm. USDC gives people and businesses fast, low-cost access to dollars and cross-border transfers, under US and EU supervision and with monthly reserve checks. The harms are those of stablecoins generally: Chainalysis estimated that stablecoins were 84% of illicit crypto volume in 2025, without giving USDC's own share, and Circle can and does freeze addresses linked to illegal activity. Its role in interest-bearing lending is weighed under usage and trading mechanisms. On balance the benefit is clear and the harm moderate.
How you can use it
Tap a card for the ruling and sourcesUSDC can be bought on the spot almost everywhere, with full and immediate settlement. Spot purchase is acceptable for an asset rated HALAL or DOUBTFUL, and USDC is DOUBTFUL. If USDC is treated as money, as in the SC Malaysia classification on Liberandum's reading, the exchange should also follow the rules of currency exchange (sarf): hand to hand, and at equal value when exchanged for dollars.
Not available: there is no exchange-traded fund that holds USDC. A fund that simply held USDC would be judged like spot, but its structure (no interest income, no lending of the USDC) would need a separate check, so this stays at caution.
Paying with USDC is easy and, in the EU, it is an authorised e-money token. But tier-1 bodies prohibit crypto as a means of payment: Indonesia's MUI holds that using cryptocurrency as currency is haram. In the UAE a foreign dollar stablecoin may be used onshore only to buy virtual assets, not goods or services. Check local rules before paying with USDC.
Not available natively: USDC is not a proof-of-stake coin, so there is no validation work to be paid for. Products marketed as "USDC staking" pay returns from lending USDC or from reserve interest shared by the issuer, which is interest (riba), so they fail just as lending and yield products do.
Always fail: borrowing to trade with leverage, without full delivery. USDC is commonly used as margin collateral on exchanges and in DeFi.
Always fail: futures, perpetuals and options are deferred exchanges without delivery, with leverage. USDC-margined contracts fall here.
Lending USDC for a return is interest on a loan of money (riba). On 27 September 2026 Maple paid about 5.2% a year and Aave and Spark about 3.6% on supplied USDC.
Circle pays holders nothing, but distributors do: Coinbase pays Coinbase One members about 4% a year in USDC rewards for keeping USDC on its platform, funded by Coinbase out of the reserve income Circle shares with it, and other exchanges and wallets run similar programmes. These are a fixed return for holding a money-like claim, paid from interest, so they fail. Holding USDC without opting in to such a programme is not affected.
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.The SAC has also resolved that investment and trading of Digital Assets that fulfil the above requirements and which are traded on Digital Asset Exchange (DAX) registered with SC are permissible.If a digital currency is backed by ribawi items comprising gold, silver and currency, it is categorised as a currency from Shariah perspective. Hence, the trading of such digital currency is subject to the principle of bai` al-sarf.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.First, holding USDC is permissible (Halal) because it serves as a stable medium of exchange with genuine utility, and the token does not pay interest or yield to its holders, avoiding riba (usury) exposure at the holder level.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.USDC can be used for Shariah-compliant transactions, provided that the transactions themselves adhere to Islamic principles.Our current position is 'tawaquf'; we can't say it is halal or haram, but we say it is better not to engage in itFiat-backed stablecoins are generally considered permissible, fully backed by the underlying currency or not, as long as this information is transparently disclosed to the users.As 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 USDC yet
Similar halal assets
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