HCS Score
Red Line Violations
These are absolute prohibitions in Islamic finance. If any red line is triggered, the asset is automatically classified as HARAM.
Riba Exposure
Not an interest-based lending or borrowing protocol
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
XRP is one of the highest-rated halal cryptocurrencies in our entire analysis series — scoring 86 out of 100 and classified as Halal for its genuine cross-border payment utility.
So when Ripple — the company behind XRP — launched its own stablecoin, many Muslim investors naturally assumed RLUSD would carry similar compliance credentials. The Ripple name. The payment focus. The institutional relationships.
But RLUSD is a fundamentally different product from XRP. And that difference leads to a completely different compliance conclusion.
We ran RLUSD through the full CoinStudy Halal Crypto Standard (HCS) methodology. Here's the complete picture.
RLUSD fails the CoinStudy HCS Sharia red-line screening. Three red lines are triggered — Riba Exposure, Guaranteed Interest, and Synthetic Interest Products — resulting in an automatic Haram classification with no further scoring.
The Ripple brand name and the payment-focused use case cannot override the fundamental compliance problem built into how RLUSD is backed and maintained.
Ripple USD (RLUSD) is a dollar-pegged stablecoin designed to maintain a stable value equal to one US Dollar. It was created to support payment settlements, liquidity transfers, blockchain transactions, digital commerce, and institutional financial activity within the Ripple and XRP Ledger ecosystem.
The stablecoin was launched as part of Ripple's strategy to expand beyond XRP into the broader digital dollar market — competing with USDT, USDC, and other established stablecoins for market share in the payments and settlement space.
RLUSD's use cases are practical and legitimate — fast transactions, liquidity movement, international settlements, digital commerce, blockchain-based payments. The utility is real.
But as we've established consistently throughout our stablecoin analysis series — utility is never the question. The question is always the reserve structure.
Like every other fiat-backed stablecoin we've analyzed, RLUSD maintains its dollar peg through reserve assets held by financial institutions.
Those reserves include cash deposits, cash equivalents, treasury instruments, money-market assets, and other reserve-backed financial products. For every RLUSD token in circulation, equivalent value is held in these reserve assets to ensure redemption and price stability.
This is the standard fiat-backed stablecoin model. It's how USDT works. It's how USDC works. It's how PYUSD works. And it's the model that creates the same Riba problem for every one of them.
Treasury instruments — US Treasury bills and notes — are interest-bearing government debt securities. They generate returns through interest payments. Cash deposits in conventional banking institutions earn interest. Money-market assets generate interest income. The entire reserve infrastructure that keeps RLUSD stable and redeemable generates income through interest-based financial mechanisms.
RLUSD's connection to Ripple and the XRP ecosystem is a distribution and marketing relationship. The reserve structure that actually makes RLUSD function is identical to every other conventional dollar-pegged stablecoin.
This is the question every Muslim XRP investor will ask — and it deserves a clear, direct answer.
XRP is a payment network token. When you hold XRP, you hold a claim on the XRP Ledger's payment infrastructure — a decentralized network that facilitates cross-border value transfers. XRP's value comes from its utility as a bridge currency and payment mechanism. It generates no interest. It holds no reserves. It creates no debt obligations.
RLUSD is a stablecoin. When you hold RLUSD, you hold a token backed by reserve assets that are held in conventional banking and financial institutions. Those reserve assets — Treasury bills, bank deposits, money-market instruments — generate interest income. That interest-based backing is what makes RLUSD stable and redeemable.
XRP and RLUSD are fundamentally different products with fundamentally different economic structures. One is a payment network token. The other is a tokenized claim on interest-bearing financial reserves.
The Ripple brand connects them. Islamic finance analysis separates them.
The reserves supporting RLUSD are connected to bank deposits, treasury securities, cash-equivalent investments, and conventional financial instruments. These assets generate returns through interest-bearing mechanisms — US Treasury interest payments, bank deposit interest rates, money-market yields.
The stability and backing of RLUSD depend fundamentally on these interest-generating reserve structures. Every RLUSD in circulation is backed by assets that earn interest income as a matter of standard financial operation.
Under Islamic finance principles, income generated through interest-based financial activity is Riba. The reserve structure that makes RLUSD stable is built on and sustained by Riba. That is the beginning and end of the compliance analysis.
Under the CoinStudy methodology this is a direct and decisive red-line violation.
RLUSD maintains transparent reserve management practices and aims to provide price stability. Excessive uncertainty is not the primary concern here.
The main issue is the nature of the reserve assets rather than uncertainty about the token itself. As with USDC — which we noted has stronger transparency than USDT — transparency about a prohibited reserve structure does not make that structure permissible.
Ripple USD was designed as a payment asset and settlement mechanism — not for gambling-like speculation. The stablecoin itself is not a speculative product.
However, stablecoins are widely used within leveraged trading platforms, speculative DeFi activity, yield farming, and high-risk financial strategies. These ecosystem-level considerations compound the compliance concerns but are not the primary driver of the haram classification.
Riba is decisive on its own.
RLUSD fails three red lines. Under the CoinStudy HCS framework a single failure results in automatic Haram classification. Three failures makes this result definitive.
Riba Exposure — ❌ Failed. The reserve backing system relies on interest-bearing financial instruments including Treasury securities and bank deposits as its foundation.
Guaranteed Interest — ❌ Failed. Treasury bills and cash equivalents in the reserve generate guaranteed interest returns — a direct Riba concern.
Synthetic Interest Products — ❌ Failed. Financial instruments within the reserve model include products that function as synthetic interest mechanisms in their economic effect.
Gambling and Betting — ✅ Passed.
Haram Industry — ✅ Passed.
Three red lines failed. Layer 2 scoring is skipped entirely.
Overall Result: Haram — Red Line Violations
By this point in our analysis series, Muslim investors will recognize an absolutely consistent pattern across every dollar-pegged stablecoin we've analyzed.
USDT — Haram. Interest-linked reserves.
USDC — Haram. Interest-bearing reserves managed by Circle.
DAI — Haram. Debt-based creation with stability fees.
PYUSD — Haram. US Treasury bills and cash-equivalent reserves.
USDG — Haram. Treasury instruments and bank deposit reserves.
RLUSD — Haram. Same reserve structure as every other conventional dollar-pegged stablecoin.
Six stablecoins. Six haram classifications. Different issuers, different branding, different blockchain ecosystems — same fundamental problem.
The problem is structural and consistent. The most common method of creating and maintaining a stable dollar-pegged digital asset involves holding interest-bearing financial instruments as reserves. That structure is incompatible with Islamic finance principles regardless of which company issues the stablecoin or which blockchain it operates on.
Ripple is a well-regulated, institutionally respected company with a long track record in the payments industry. RLUSD benefits from Ripple's institutional relationships, regulatory standing, and established reputation in cross-border payment infrastructure.
From a conventional financial risk perspective, this makes RLUSD one of the more credible stablecoins in the market. Ripple's backing provides meaningful assurance about the quality of reserve management and redemption reliability.
But from a Sharia compliance perspective — trust in the issuer is irrelevant to the reserve structure analysis. PYUSD had PayPal's institutional backing. USDC has Circle's regulatory compliance. Both are haram. RLUSD has Ripple's institutional credibility. It is also haram.
The compliance failure is structural — not operational. Trustworthy management of a prohibited reserve structure doesn't make the structure permissible.
Before using or investing in any stablecoin — regardless of its issuer or blockchain ecosystem — ask yourself:
What exactly backs this stablecoin and where do the reserves sit? Do the reserve assets generate interest income as part of their standard operation? Does the reserve structure depend on Treasury securities, bank deposits, or money-market instruments? Would these same reserve assets be haram if held directly rather than through a stablecoin structure? Are there genuinely Sharia-compliant alternatives available for the stable value I need?
These questions apply equally to RLUSD, USDT, USDC, PYUSD, USDG, and any future stablecoin. The issuer's name and the blockchain it operates on are secondary to the reserve structure underneath.
Ripple USD (RLUSD) is classified as Haram / Non-Compliant under the CoinStudy Halal Crypto Standard.
Three Sharia red lines are triggered — Riba Exposure, Guaranteed Interest, and Synthetic Interest Products — resulting in automatic Haram classification. The reserve backing structure relies on conventional financial assets, treasury instruments, and interest-bearing reserve systems that create direct exposure to Riba-based financial activity.
Ripple's institutional credibility, payment-focused mission, and connection to the XRP ecosystem are acknowledged but irrelevant to this assessment. The reserve structure is what determines compliance. And the reserve structure is the same interest-bearing model that makes every conventional dollar-pegged stablecoin haram.
For Muslim investors who hold or use XRP — remember that XRP's halal status comes from its nature as a payment network token, not from anything Ripple does as a company. RLUSD is a different product with a different structure and a different compliance conclusion.
Why USDT and other stablecoins are Haram if FIAT is not ? Read here https://coinstudy.co/blog/why-usdt-is-haram-if-fiat-isn-t
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.
Guaranteed Interest
No guaranteed interest obligations
Synthetic Interest Products
No synthetic interest instruments
3 Red Lines Failed
This asset is automatically classified as HARAM.
