HCS Score
Red Line Violations
Research Opinion, Not a Fatwa
These are absolute prohibitions in Islamic finance. If any red line is triggered, the asset is automatically classified as HARAM.
Ecosystem Riba Exposure
Not directly or indirectly connected to interest generating mechanisms
Gambling / Betting
No gambling or betting mechanism
Haram Industry
Not involved in haram industry
Based on Red Line Screening and HCS Scoring.
Haram / Non Compliant
This cryptocurrency is evaluated as Haram for investment and use because the asset demonstrates material Sharia compliance concerns within the CoinStudy HCS framework.
Explanation
This asset shows significant concerns related to Sharia compliance, financial structure, or speculative design.
Reviewed by
CoinStudy Shariah Board
Some stablecoins try to be everything to everyone. FDUSD is honest about being something much narrower.
First Digital USD launched in June 2023 from Hong Kong as a regulated alternative when Binance phased out its previous stablecoin, BUSD, following regulatory pressure in the United States. FDUSD became the designated replacement, offered with zero trading fees against major pairs on Binance, and its growth has been almost entirely tied to that single relationship ever since.
By early 2026, FDUSD's trading volume routinely matched or exceeded its entire circulating market capitalization in a single day, an unusual pattern that reveals what the stablecoin actually is. Not a savings instrument. Not a broad cross-chain settlement layer. A purpose-built trading vehicle for activity on one specific exchange.
For Muslim investors, the compliance question follows the same path we have walked through fourteen times before in this series. We ran FDUSD through the full CoinStudy Halal Crypto Standard (HCS) methodology. Here is the complete picture.
FDUSD fails the CoinStudy HCS Sharia red-line screening. Three red lines are triggered, specifically Ecosystem Riba Exposure, Guaranteed Interest, and Synthetic Interest Products, resulting in an automatic Haram classification with no further scoring.
First Digital USD is a fiat-collateralized stablecoin issued by FD121 Limited, a subsidiary of Hong Kong-based First Digital Group. It is designed to maintain a 1:1 value with the US dollar and operates across Ethereum, BNB Chain, Solana, Sui, Arbitrum, and TON.
The stablecoin is regulated under Hong Kong's Trust Ordinance, with reserves held by First Digital Trust Limited, a Hong Kong-registered public trust company that controls minting, burning, and redemption. Reserves are held with qualified custodian banks in segregated accounts, with monthly independent attestation reports published to verify the backing.
What makes FDUSD genuinely distinct from other stablecoins in our series is its near-total dependency on a single exchange relationship. When Binance dropped support for BUSD in early 2024 following Paxos's regulatory settlement, Binance designated FDUSD as the replacement for zero-fee Bitcoin and Ethereum trading pairs. That single decision became the primary driver of FDUSD's entire market existence.
This is where the compliance analysis becomes straightforward.
FDUSD reserves consist of cash, short-term US Treasury Bills, bank deposits, and reserve repurchase agreements, held with qualified custodian institutions and verified through monthly attestation reports. This is structurally identical to the reserve model used by USDC, USDT, and every other major conventionally-backed stablecoin in our analysis series.
US Treasury Bills are interest-bearing government debt instruments. They generate predictable interest income for whoever holds them. Reserve repurchase agreements, commonly called repos, are short-term lending arrangements that also generate interest-based returns. Both instrument types are central components of FDUSD's reserve composition.
This reserve structure is not a peripheral detail. It is the entire mechanism that allows FDUSD to maintain its dollar peg and remain redeemable. The interest income generated by these instruments funds the operational infrastructure that makes the stablecoin function.
Beyond the reserve-based Riba concern that determines FDUSD's primary classification, there is a second and distinct issue worth understanding.
FDUSD's market existence is almost entirely a function of its relationship with Binance. The stablecoin's daily trading volume regularly approaches or exceeds its entire circulating supply, a pattern that confirms FDUSD functions primarily as exchange-native trading infrastructure rather than as a broadly used payment or settlement instrument. Independent analysis has described FDUSD's future as binary, dependent almost entirely on whether Binance maintains or withdraws its promotional support.
CoinStudy classifies BNB as Haram due to the Binance ecosystem's Ecosystem Riba Exposure through its lending products, earn programs, and perpetual futures markets. FDUSD's deep structural dependency on Binance as a trading venue means it inherits an additional layer of ecosystem exposure beyond its own reserve-based compliance failure. Even if FDUSD's reserve structure were somehow resolved, its near-total embeddedness in an exchange ecosystem that CoinStudy classifies as Haram would remain a significant concern.
This is not the primary basis for FDUSD's classification, since the reserve-based Riba failure is sufficient on its own. But it illustrates how a stablecoin's compliance problems can compound across multiple dimensions simultaneously.
FDUSD's reserves held in US Treasury Bills, bank deposits, and reserve repurchase agreements generate interest income that funds the reserve management infrastructure making FDUSD stable and redeemable at one dollar. The structural connection between FDUSD's stability guarantee and interest-bearing assets is direct, documented, and disclosed in First Digital's own monthly reserve reports.
This triggers the Ecosystem Riba Exposure red line for the same reason it has triggered this red line for every conventionally-backed stablecoin CoinStudy has analyzed.
US Treasury Bills and reserve repurchase agreements both generate predetermined interest income. These instruments are specifically selected for stablecoin reserves because they offer reliable and predictable interest returns while maintaining high liquidity. This is precisely the guaranteed interest income that the Guaranteed Interest red line is designed to identify.
FDUSD is a synthetic representation of US dollar value backed by an underlying pool of interest-bearing instruments. Holding FDUSD means holding a synthetic claim on a reserve pool that itself generates Riba income, functioning economically as a synthetic interest-bearing instrument in the same way every other Treasury-backed stablecoin in our series functions.
Ecosystem Riba Exposure — ❌ Failed. FDUSD reserves are composed of US Treasury Bills, cash, bank deposits, and reserve repurchase agreements, all of which are interest-bearing instruments that fund the reserve infrastructure maintaining the dollar peg.
Guaranteed Interest — ❌ Failed. Treasury Bills and repurchase agreements in FDUSD's reserves generate predetermined guaranteed interest returns at the institutional custodial level.
Synthetic Interest Products — ❌ Failed. FDUSD functions as a synthetic dollar token representing a claim on an interest-bearing reserve pool, structurally equivalent to a synthetic interest-bearing instrument.
Gambling and Betting — ✅ Passed.
Haram Industry — ✅ Passed.
Three red lines failed. Under the CoinStudy HCS framework, any single red-line failure results in an automatic Haram classification. Three failures makes this result definitive.
Layer 2 scoring is skipped entirely. As per the CoinStudy methodology, projects that fail Layer 1 are not eligible for further scoring.
Overall Result: Haram — Red Line Violations
CoinStudy has now analyzed fifteen stablecoins. Every single one has received a Haram classification.
USDT, USDC, DAI, PYUSD, USDG, RLUSD, USDD, United Stablecoin, TrueUSD, GHO, USD0, USD1, EURC, USDGO, and now FDUSD. Conventional reserve models, algorithmic mechanisms, collateralized debt structures, and synthetic derivatives-based designs all fail CoinStudy's HCS screening for related but distinct structural reasons, with interest-bearing reserve assets being the most common and direct cause across the majority of these classifications.
FDUSD's specific case adds a regulated Hong Kong trust structure and a near-total dependency on a single Haram-classified exchange to the now-familiar pattern of Treasury Bill and repo-based reserve backing.
Before using any stablecoin, ask yourself honestly.
How exactly is this stablecoin backed? Do the reserve assets generate interest income through Treasury instruments or repurchase agreements? Is the stablecoin's trading activity and adoption dependent on a single exchange whose own native token is classified as Haram? Are there genuinely halal alternatives available for what I need?
These questions apply to FDUSD with particular clarity given its publicly disclosed reserve composition and its unusually transparent dependency on Binance.
First Digital USD is classified as Haram / Non-Compliant under the CoinStudy Halal Crypto Standard.
Three Sharia red lines are triggered, specifically Ecosystem Riba Exposure, Guaranteed Interest, and Synthetic Interest Products, resulting in automatic Haram classification. FDUSD's reserves are composed of US Treasury Bills, cash, bank deposits, and reserve repurchase agreements, all interest-bearing instruments that fund the infrastructure maintaining the token's dollar peg.
First Digital's regulatory registration in Hong Kong and its monthly attestation reports demonstrate genuine conventional transparency. Neither changes the underlying reserve composition that determines the Islamic finance assessment. FDUSD joins fourteen other stablecoins in CoinStudy's comprehensive haram record, with the added concern of a near-total structural dependency on Binance, an exchange whose native token CoinStudy separately classifies as Haram.
Scholarly Disagreement — An Important Note
CoinStudy's HCS methodology classifies FDUSD as Haram based on the structural Riba concerns in its reserve backing. The Treasury Bills, repurchase agreements, and other interest-bearing instruments that maintain its dollar peg are conventional interest-generating financial instruments. This structural Riba triggers our red-line screening.
However CoinStudy's Shariah Board acknowledges a significant scholarly disagreement on this question that Muslim investors deserve to know about.
Some contemporary Islamic finance scholars hold that using dollar-pegged stablecoins purely as a medium of exchange is permissible. Their reasoning is rooted in a well-established Islamic jurisprudence principle. The sin of a prohibited act belongs to the actor who performs it, not to every person in the chain who subsequently uses the resulting product. Under this view, First Digital Trust commits the prohibited act by holding Riba-generating Treasury Bills and repurchase agreements. That sin belongs to the issuer. The Muslim who uses FDUSD for payments or trading is not holding Treasury instruments, not earning interest, and not committing the prohibited act themselves.
This position is further supported by the fact that ordinary FDUSD users never directly interact with the underlying reserve instruments at all, receiving only dollar value upon redemption with zero contact with the interest-bearing assets themselves.
CoinStudy's HCS classification remains Haram because our methodology evaluates structural compliance. The reserve structure triggers our red lines regardless of user intent or usage purpose.
But Muslim investors should understand that this is a genuine area of scholarly disagreement, not a settled question with unanimous consensus. If you use FDUSD purely as a medium of exchange for trading or payments and do not participate in any yield-generating mechanisms, you should consult a qualified Islamic scholar for personal guidance on your specific usage.
The prohibition of the structure and the permissibility of the usage are two different questions that can have different answers. CoinStudy answers the structural question. The usage question requires personal scholarly guidance.
Read detail analysis of following coins here:
Is USDT Halal?
Is BNB Halal?
Is USDGO Halal?
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Disclaimer: This analysis is provided for educational and research purposes only. This analysis is based on guidance from CoinStudy's HCS Shariah Board members. CoinStudy does not issue personal fatwas or financial advice. Please consult a qualified Islamic scholar for individual guidance.
Authoritative ruling from the Chairman of the CoinStudy Sharia Board.
"Scholars have differing opinions regarding USDT and other fiat-backed stablecoins. Some scholars consider it impermissible and some consider it permissible. According to our research, its use is permissible. Its backend structure and currency leveling method is not interest in totality, however caution is necessary due to the presence of interest-based transactions within it. There is also an element of Gharar in that it is not certain that there is a dollar behind every unit. Despite this, its use as a digital currency is correct. If it is used in halal means the profit will be halal, and if it is used in haram dealings it will be haram."
This ruling applies to USDT and to other structurally similar fiat-backed stablecoins. CoinStudy's HCS structural classification remains as noted above, reflecting the interest-adjacent backend and Gharar elements the chairman himself identified. However the chairman's ruling confirms that using USDT or other fiat-backed stablecoins purely as a digital medium of exchange in halal transactions is permissible under his scholarly assessment. This is entirely consistent with the Scholarly Disagreement section published above.
Guaranteed Interest
No guaranteed interest obligations
Synthetic Interest Products
No synthetic interest instruments
3 Red Lines Failed
This asset is automatically classified as HARAM.
