Even fully screened assets can pick up small amounts of tainted income along the way — purification means giving that specific portion back, not paying extra.

Based on JPY Coin v1's riba, gharar and maysir screening — see how we calculate purification amounts.

Overseen by Imam Omar Siddiqi, Shariah scholar and Imam of JMIC, among others, with donations paid directly to Jamiya Masjid & Islamic Centre — UK registered charity no. 1089986. Sent wallet-to-wallet; CryptoUmmah never custodies your funds. Always verify the destination address before confirming in your wallet.

Mashbooh · Doubtful · Risky

Your exact purification amount, calculated from JPY Coin v1's Shariah compliance score.

Your realized profit on JPYC (USD) — profit only, not principal

Amount to return0.00 USDC

to Jamiya Masjid & Islamic Centre, a registered UK charity

Purification isn't Zakat and isn't tax-deductible — it's the return of income that wasn't rightfully yours.

Scholar-verified · UK registered charity

Key facts

Chain	Ethereum
Last reviewed	19 Jul 2026

Written by ThanvirFounder, Ex Director S&P Global Energy

Reviewed by Imam Omar SiddiqiShariah Scholar

Islamic Finance Principles Assessment

Riba — Does JPY Coin v1 involve interest?

JPY Coin v1 itself is a non-interest-bearing yen-pegged token, but the company's revenue model is built on interest income from Japanese government bonds and bank deposits held in reserve. This is a structural riba exposure at the issuer level rather than a feature paid to token holders. Muslim investors should treat holding JPYC as indirectly connected to an interest-earning corporate structure, even though the token's face value and peg mechanism are themselves interest-free.

Assessment: Riba Dominant Score: 41.4/100

Our methodology examines 10 criteria to evaluate how well JPY Coin v1 avoids interest-based mechanisms.

JPYC Inc. discloses that its revenue derives from interest earned on Japanese Government Bonds (JGBs) and bank deposits that back the circulating token supply. This means the issuer's business model is fundamentally reliant on riba-based income streams, even though individual token holders receive no interest distribution from holding JPYC. The token's 1:1 peg to the yen is maintained through these reserves, so the underlying treasury composition includes conventional interest-bearing government debt. This is a meaningful structural concern: the coin's stability and issuer solvency are financed by an interest-based mechanism, which sits uncomfortably with riba-avoidance principles even though it is once-removed from the holder's own transaction.

The base JPYC protocol contains no lending, borrowing, or interest-rate functionality; it is purely a mint-and-redeem payment token. However, third-party DeFi integrations such as Morpho, Secured Finance, and Euler allow holders to lend JPYC for yield, reportedly around 5% APR. This yield is generated through conventional interest-bearing lending markets, not through profit-sharing or asset-backed trade structures. While JPYC Inc. itself does not operate these lending markets, users who deposit JPYC into them are directly engaging in interest-based transactions, which would be impermissible regardless of the underlying token's own neutral design.

Gharar — How much uncertainty does JPY Coin v1 involve?

JPY Coin v1 carries comparatively low informational uncertainty for a crypto asset, given its named leadership, regulatory status, and public audit history. Some uncertainty remains around centralized admin controls and the small, thinly traded secondary market. On balance, transparency is strong, though holders should understand the operational and liquidity risks that persist.

Assessment: Moderate Gharar (Material Uncertainty) Score: 57.1/100

Our methodology examines 15 criteria including team transparency, audit quality, and governance.

JPYC's leadership is fully named and credentialed: founder/CEO Noritaka Okabe (Hitotsubashi University economics graduate, prior co-founder of RealWorld Games), alongside a disclosed CFO/CCO, CTO, and board/audit supervisors. The company, JPYC Inc. (formerly Japan Crypto Asset Market Inc.), has operated since 2019 and holds three consecutive years of unqualified audit opinions on its financial statements. Smart contract code is open-source on GitHub. Circle is reported as an investor, adding a further layer of institutional visibility. JPYC has also proactively warned the public about counterfeit tokens impersonating it, a transparency-positive signal rather than a red flag.

JPYC's smart contracts were reviewed in a 2022 audit by security researchers Xuxian Jiang and Jing Wang, which identified admin-role trust concentration and ERC-20 compliance issues, and separately underwent a Code4rena audit contest in February 2022 that returned only low-severity or informational findings with no high or medium vulnerabilities. A "Big 4" audit of planned bridge contracts is referenced but left unnamed and undated in available sources, which is a minor disclosure gap. Reserve composition (cash, deposits, short-term JGBs) is disclosed at a general level, though granular real-time reserve attestations are not detailed in the sources reviewed.

Maysir — Does JPY Coin v1 involve gambling or speculation?

JPY Coin v1 is designed as a stable, fiat-pegged settlement instrument, not a speculative or wagering product. Its fixed 1:1 yen value and KYC-gated transaction limits actively discourage price speculation. The main maysir-adjacent activity occurs in thin secondary markets rather than in the token's core design.

Assessment: Moderate Maysir (High Risk) Score: 61.3/100

Our methodology examines 11 criteria to determine whether JPY Coin v1 is a gambling instrument or a genuine economic tool.

JPYC's intended function is payment and settlement, mirroring the yen's value one-to-one rather than seeking price appreciation. This gives it genuine productive utility as a digital cash equivalent for cross-border and on-chain commerce, distinct from assets whose value proposition rests on price movement or chance-based payout. Issuer-imposed daily transaction limits (roughly one million yen for individuals, ten million for companies) and KYC/AML controls further reinforce its identity as a functional payment tool rather than a trading or gambling instrument, aligning its core design away from speculative use.

Despite its stable-value design, JPYC's on-chain footprint is small and thinly traded, with a circulating market cap near $801,000 and daily volume around $2,100, spread across roughly 411 holders on multiple chains. Reports describe this secondary market as "speculative, thinly traded" rather than utility-driven, meaning current trading behavior does not yet reflect the payments use case the token was built for. This is a market-adoption and liquidity concern rather than a flaw in the coin's own design, and such secondary-market thinness should not be read as evidence that JPYC itself is a speculative instrument.

The Full 27-Point Screening

1. Legitimacy (4 criteria)

Criterion	Score	Analysis
Team Transparency	85/100	Founder Okabe and multiple executives are named with verifiable credentials and public profiles.
Fraud & Scam Risk	78/100	Regulated, licensed, audited, and no fraud/rug indicators found; low market liquidity is a market-standing issue, not a fraud signal.
Use Case Legitimacy	88/100	Sources describe clear real-world payment, remittance and settlement utility as a regulated yen stablecoin.
Ethical Practices	85/100	The coin's own design is a payment instrument, not built for any prohibited industry.

Summary: JPYC is led by a named, credentialed founder and executive team operating a regulated Japanese entity with no fraud indicators found in the sources.

2. Project Operations (9 criteria)

Criterion	Score	Analysis
Core Protocol Business	88/100	Base protocol is a yen-denominated payment/settlement token, not in a prohibited sector.
Transaction Fees	82/100	Issuance and redemption are fee-free at the JPYC level; gas is paid separately in the host chain's native asset.
Treasury Assets	30/100	Reserves explicitly include interest-bearing short-term Japanese government bonds alongside bank deposits.
Revenue Model	18/100	Company revenue model is explicitly stated as interest income earned on JGB reserves.
Transparency	78/100	Contracts are open-source, white papers published, and independent audits/contests exist.
Governance	30/100	Admin roles can mint, pause, freeze and upgrade contracts, indicating significant centralization.
Launch Fairness	65/100	No traditional pre-mine/ICO is described; tokens mint on-demand against deposited yen, though evidence is inferential.
Token Distribution	40/100	Only 411 holders and ~16.7M circulating tokens indicate a highly concentrated holder base.
Speculation/Utility Ratio	60/100	Design is utility-first (payments), but sources note thin trading and speculative/arbitrage-dominated market activity.

Summary: JPYC is an open-source, fee-free ERC-20 yen-pegged payment instrument across multiple chains, but control over minting, pausing and upgrades remains centralized with the issuer.

3. Financial Health (4 criteria)

Criterion	Score	Analysis
Protocol Revenue	18/100	Protocol/company revenue is explicitly interest-based (JGB yield).
Financial Status	45/100	Peg is stable and reserves transparent, but market cap and liquidity are very small and volatile per sourced figures.
Interest Assessment	15/100	Reserve composition and revenue model are explicitly interest-based at the core financial level.
Audit Quality	60/100	Named audits (Xuxian Jiang/Jing Wang report, Code4rena contest) exist with only low/informational findings; a "Big 4" bridge audit is referenced but unnamed.

Summary: The protocol's own revenue and part of its reserve backing are explicitly interest-based, and audits exist from named firms though the market itself remains small and thinly traded.

4. Token Economics (5 criteria)

Criterion	Score	Analysis
Token Purpose	85/100	Token is explicitly a payment utility instrument pegged 1:1 to yen, not a speculative meme design.
Governance Rights	N/A	Sources show no on-chain holder governance rights; this is structurally expected for a centrally issued fiat-pegged stablecoin.
Rewards Distribution	45/100	No native reward mechanism exists at protocol level; any yield is third-party and variable, but company-level revenue is fixed/interest-based.
Speculation Controls	72/100	Peg design plus issuer KYC/AML transaction limits function as anti-speculation controls.
Asset Backing	35/100	Backing explicitly includes interest-bearing government bonds alongside cash/bank deposits.

Summary: The token is a genuine 1:1 yen payment utility instrument with no holder governance and no native reward mechanism, backed partly by interest-bearing government bonds.

5. Staking Mechanism

JPY Coin v1 has no native staking mechanism, so these five criteria are not applicable and are excluded from the score entirely rather than counted as zeros.

Overall Assessment: JPYC is a legitimate, regulated, transparently-run yen stablecoin whose main Shariah concerns stem from interest-bearing reserve assets and an interest-income revenue model rather than from fraud, opacity, or speculative design.

Is JPY Coin v1 halal?

RibaSharia pillar · 41.4/100 · Review · 10 criteria

GhararSharia pillar · 57.1/100 · Review · 15 criteria

MaysirSharia pillar · 61.3/100 · Review · 11 criteria

LegitimacyDiligence dimension · 84/100 · Compliant · 4 criteria

ProjectDiligence dimension · 54.6/100 · Review · 9 criteria

FinancialDiligence dimension · 34.5/100 · Avoid · 4 criteria

TokenomicsDiligence dimension · 57.4/100 · Review · 5 criteria

StakingDiligence dimension · 0/100 · Avoid · 5 criteria

A portion of profit from JPYC isn't fully yours to keep — here's how to return it

27-point Shariah breakdown of JPYC