Key takeaways
- Published rulings conflict. One accepts digital assets as property on conditions; a fatwa reported on 10 July 2026 names USDT and rejects it.
- Unlike most tokens, USDT is issued and redeemed by a company, Tether, and each token refers to one US dollar.
- Tether's terms, as read, contain no clause that pays holders interest or yield. A platform's lending or locking product is a separate contract.
- Being a stablecoin answers the volatility question, not the property question, and this guide has not read Tether's reserve reports.
- A halal label is only as reliable as the named reviewer, method and date behind it.
The short answer
Whether USDT is halal depends on which authority you follow. Two published positions reach opposite results, and neither is a consensus. This guide sets out what each says, how USDT does on the five tests described in the Fasset guide on whether crypto is halal, and what a label can and cannot prove. It does not issue a ruling.
What USDT is
USDT, or Tether, is a stablecoin: a token designed to hold a steady value against a currency, here the US dollar. It differs in kind from Bitcoin, which has no issuer. A company issues and redeems USDT. Tether's Token Terms of Sale and Service, last updated on 26 February 2026 according to the page, set the redemption price at one US dollar per USDT for its verified customers. Redemption is available to those customers, not to every holder.
That structure matters to scholars because the value of the token rests on a claim against an issuer and on what the issuer holds in reserve. The reserve question needs Tether's own published reports, which this guide has not read, so it makes no statement about them. For comparison, the guide on Bitcoin notes that a stablecoin raises different questions because a company stands behind it.
The view that permits it
The Shariah Advisory Council of Securities Commission Malaysia resolved in 2020, at its 233rd and 234th meetings, that digital assets are property (mal) and may be traded on exchanges registered with the Commission. The resolution attaches conditions, including that the money raised goes to Shariah-compliant purposes and that the rights and benefits attached to the asset are compliant. It speaks of digital assets generally and applies within Malaysia's regulated market. This guide did not find that it names USDT, so applying it to USDT is an inference, not a finding.
The Indonesian Ulema Council (MUI) fatwa of 2021 takes a middle position and is summarised in the main halal guide. It is not repeated here.
The view that prohibits it
A fatwa by Mufti Muhammad Taqi Usmani of Darul Uloom Karachi, reported by The News International on 10 July 2026, holds that cryptocurrency is not valid property and treats it as a record of numbers in an account. As reported, it says paying for goods with crypto, USDT included, is not permissible. It arose from a question about two purchases, one made with a token and one with USDT, and reaches the same result for both.
That is the clearest published statement naming USDT. It is a press report, and the fatwa's own text was not read. Anyone following this view should take their exact situation to a scholar who holds it.
How USDT fares on the five tests
The method in the guide on how to screen a coin yourself asks five questions. The table applies them to USDT using only what has been read.
| Test | What the sources show | Status |
|---|---|---|
| Property (mal) | Malaysian council says digital assets are property; the July 2026 fatwa says USDT is not | Disputed |
| Interest (riba) | Tether's terms contain no clause paying holders interest or yield | No flag on the token itself |
| Uncertainty (gharar) | One-dollar redemption price for verified customers; reserves not read | Open |
| Gambling (maysir) | An outright purchase delivered to your wallet is a sale; derivatives are separate | Depends on the contract |
| Lawful purpose | Issuer income and reserve holdings not examined | Open |
| A method, not a ruling. "Open" means the evidence was not read, not that the test is failed. | ||
The interest result applies to the token. Many platforms pay a rate for lending or locking stablecoins, and that excess on what works as a loan raises the riba test for that product, whatever the token. AAOIFI's Shari'ah Standards do not cover crypto-assets, so scholars reason by analogy, and Standard No. 1 requires both sides of a currency exchange to take possession before they part. How that applies to a token exchange is itself debated.
What a halal label proves
The Fasset Shariah reports list, as read for the halal guide, labels USDT as compliant, while the July 2026 fatwa reaches the opposite view. The list showed no reviewer, method or date. A label that names none of the three cannot be checked, so treat it as a starting point. The About page records what Fasset publishes on Shariah governance and what is missing, and Fasset's statement that its services are delivered without interest speaks to the riba test only.
What to do with this
- Decide whose rulings you follow before you screen. If your authority holds that crypto is not property, the remaining tests do not arise.
- If you follow a view that accepts tokens as property on conditions, read the issuer's terms and reserve reports, and screen each way you will hold or trade the token.
- Do not assume that "stable" means "settled". Price stability and Shariah status are separate questions.
- Check the firm as well as the token. Fasset FZE holds a VARA VASP Licence for Broker-Dealer Services, reference VL/23/07/002, issued on 30 November 2023, covering activity carried on in or from Dubai. That is supervision of a firm. It is not a Shariah ruling and does not protect the value of what you buy. See is crypto legal in the UAE for how to check a licence.
- Read the published fees before converting, since conversion costs are part of what a trade costs you.
If you later sell USDT for dirhams, the guide on cashing out crypto to AED compares the routes. Fasset is not a bank. Balances are not bank deposits and are not covered by a deposit guarantee scheme; the guide on how a USD account works explains Fasset's separate USD account.
Frequently asked questions
Is USDT halal or haram?
Scholars disagree, so there is no single answer. A 2020 Malaysian resolution treats digital assets as property, while a fatwa by Mufti Muhammad Taqi Usmani, reported on 10 July 2026, holds that crypto, USDT included, is not valid property. Which view you follow decides the result; ask a scholar you trust.
Does USDT pay interest?
Tether's Token Terms of Sale and Service, last updated on 26 February 2026 according to the page, contain no clause that pays holders interest or yield. That concerns holding the token itself. A platform product that pays a return for lending or locking USDT is a separate contract and raises the interest test.
Is a stablecoin safer from a Shariah view than other crypto?
It answers some questions, such as unknown quantity or wild price swings, but not the main one. Whether a digital token is property, and whether the reserves and redemption rights are sound, are separate points. This guide has not read Tether's reserve reports.
Can I use USDT to pay for goods if I follow the Usmani fatwa?
The fatwa, as reported, holds that paying for goods with crypto, USDT included, is not permissible. The press report is not the fatwa's own text, which was not read, so put the exact question to a scholar who follows that view.
Is it halal to trade USDT against other tokens?
That is a contract question, separate from the coin. An outright exchange delivered to your wallet differs from leveraged, margin or futures positions, which raise the interest, deferred-exchange and gambling tests. Screen the way you trade as well as the token.
Does a VARA licence make USDT halal?
No. A licence such as the one held by Fasset FZE is supervision of a firm carrying on regulated activity in or from Dubai. It is not a Shariah ruling on any token. See the guide on whether crypto is legal in the UAE.
Sources
Sources 1 to 5 were opened and read for the Fasset guide on whether crypto is halal, on 12 October 2026. They were not re-opened for this article, which restates the points cited from them. The VARA register entry was also read on 12 October 2026 for that guide. Statements about Fasset come from fasset.com, read on 6 and 12 October 2026.
- Securities Commission Malaysia, Resolutions of the Shariah Advisory Council: Digital Assets from Shariah Perspective, 233rd and 234th meetings (29 June and 20 July 2020), sc.com.my/development/icm/shariah/resolutions-of-the-shariah-advisory-council-of-the-sc, accessed 12 October 2026.
- The News International (Pakistan), Cryptocurrency transactions impermissible under Shariah: Mufti Taqi Usmani, 10 July 2026, thenews.pk/print/1425134-cryptocurrency-transactions-impermissible-under-shariah-mufti-taqi-usmani, accessed 12 October 2026. A press report; the fatwa's own text was not read.
- Majelis Ulama Indonesia (MUI), Keputusan Fatwa Hukum Uang Kripto atau Cryptocurrency, 12 November 2021, in Indonesian, mui.or.id/baca/berita/keputusan-fatwa-hukum-uang-kripto-atau-cryptocurrency, accessed 12 October 2026.
- AAOIFI, Shari'ah Standards, English volume (No. 1 is cited here), aaoifi.com/shariaa-standards/?lang=en, accessed 12 October 2026.
- Tether, Token Terms of Sale and Service, last updated 26 February 2026, tether.to/en/legal/, accessed 12 October 2026. Tether's reserve reports were not read.
- Virtual Assets Regulatory Authority, public register entry for Fasset FZE, vara.ae/en/licenses-and-register/public-register/fasset-fze/, accessed 12 October 2026.
Not a ruling and not investment advice
For information only. Not investment, legal, tax or religious advice. This guide describes a scholarly debate and is not a fatwa. Crypto-assets are volatile, and you may lose the amounts you put in.