Is USDC Halal - Crypto Ummah

HALAL Screening Cryptocurrency

Is USDC Halal?

Complete Shariah Compliance Screening of USDC to determine if it is a Halal or Haram cryptocurrency

Legitimacy Screening

What is USDC

USDC, or USD Coin, is a type of cryptocurrency that is designed to be stable and easy to use. Unlike many other cryptocurrencies that can have wild price swings, USDC is pegged to the U.S. dollar, meaning that one USDC is always worth about one dollar. This makes it a great option for people who want to use digital money without worrying about sudden changes in value. You can use USDC for online transactions, trading, or even saving, just like you would with regular dollars, but in a digital format. What makes USDC unique is its transparency and reliability. It’s backed by real dollars held in reserve, and the company behind it regularly undergoes audits to ensure that there are enough dollars to match the USDC in circulation. This gives users confidence that their money is safe and that they can easily convert USDC back to dollars whenever they want. Plus, it’s built on blockchain technology, which means transactions are secure and can be done quickly without needing a bank. So, it’s like having the best of both worlds—digital convenience with the stability of traditional money!

Transparent and Credible Team

The report indicates that USDC is a collaboration between Circle and Coinbase through the CENTRE Consortium. Circle is a well-established company with a clear physical presence and regulatory compliance framework. The project's website provides detailed information about its regulatory compliance, reserve management, and technical standards. The founders are not specifically mentioned or allocated tokens, the focus is to maintain a stable supply backed by USD reserves. This suggests a high degree of transparency and credibility. Score: 85

Clear Use Case or Purpose

USDC's purpose is clearly defined as a stablecoin designed to maintain a constant value relative to the US dollar, backed by a combination of cash and short-term U.S. Treasury bonds. It is used for peer-to-peer transfers, cross-border remittances, humanitarian aid, and DeFi trading. This shows a clear and legitimate use case. Score: 95

Absence of Fraudulent Behavior

The report highlights multiple audits and attestations by reputable third parties like Deloitte & Touche LLP, security audits of the smart contracts, and a robust regulatory framework that includes registration with FinCEN and compliance with state money transmission laws. There are monthly attestations and weekly disclosures of reserve holdings, as well as verification of mint and burn flows. This indicates a strong absence of fraudulent behaviour. Score: 90

Ethical Practices

USDC operates under a comprehensive regulatory framework and aims for transparency. It implements AML and KYC protocols. The project is not designed to generate returns for holders and does not make any claims about increasing in value. It explicitly states that holders are not entitled to any interest from the reserves. The focus is on stability and compliance. Score: 85

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USDC Halal Project Screening

Are the project’s purpose and operation Shariah Compliant.
Does the project operate ethically and transparently, without harm to society.
Does the project promote positive societal or environmental outcomes.

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USDC Financial Screening

Does the revenue involve Riba (interest), Gharar (excessive uncertainty), or Haram activities.
What red flags are hidden within the projects finances and are within permissible limits.
Types of revenue generation activities and the percentage that may be Riba or interest based.
Audits from reliable sources

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USDC Token Screening

Is the Token governance fair and ethical?
Are profit-sharing mechanisms (e.g., staking rewards, dividends) compliant with Islamic Finance?
Does the token’s design, or unlock schedule raise unethical concerns?
Halal underlying asset, and free from impermissible elements

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Is Staking USDC Halal?

Are the staking operation aligned with Shariah-compliant structures.
Does the staking avoid Gharar (excessive uncertainty) and Maysir (gambling)?

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USDC Shariah Compliance Score

Total Shariah Compliance Score out of 100
27 different components researched
More comprehensive than any other platform