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
Ripple has spent over a decade building the infrastructure for global payments.
XRP, Ripple's native digital asset, scored 86 out of 100 in CoinStudy's Halal analysis, one of the stronger results in our entire payment cryptocurrency series. Its focus on genuine cross-border payment utility, absence of interest-generating mechanisms at the protocol level, and real institutional adoption gave it a strong compliance foundation.
In December 2024, Ripple launched RLUSD, its own dollar-pegged stablecoin, designed to complement XRP in the payments ecosystem. For Muslim investors who already trust XRP and Ripple's broader vision, RLUSD raises an immediate and important question.
Does the confidence in XRP extend to RLUSD?
The honest answer is no. And understanding precisely why requires examining what RLUSD actually is and where its stability comes from.
We ran RLUSD through the full CoinStudy Halal Crypto Standard (HCS) methodology. Here is the complete picture.
RLUSD 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.
The problem is identical to every other dollar-pegged stablecoin CoinStudy has analyzed. RLUSD's stability depends on interest-bearing reserve assets. The Ripple brand does not change this fundamental structure.
Ripple USD is a US dollar-pegged stablecoin issued by Ripple, designed to maintain a stable 1:1 value with the US Dollar. It operates on both the XRP Ledger and Ethereum, making it accessible across two of the most widely used blockchain ecosystems.
RLUSD was launched in December 2024 following approval from the New York Department of Financial Services, giving it one of the most rigorous regulatory authorizations available for a stablecoin in the United States. It is issued by Standard Custody and Trust Company, a Ripple subsidiary, which holds the reserves backing each token.
The use cases are practical and genuine. RLUSD is designed to provide stable value within Ripple's payment network, enabling more predictable cross-border settlement, serving as a liquidity tool alongside XRP for payment corridors, and providing a stable digital dollar for institutional and retail users in the broader crypto ecosystem.
None of this changes the compliance analysis.
RLUSD maintains its dollar peg through reserves held by regulated custodians.
Ripple has disclosed that RLUSD reserves consist of US dollar deposits, US Treasury bills, and cash equivalents. For every RLUSD token in circulation, equivalent value is held in these reserve assets, ensuring that holders can always redeem their tokens for dollars at a 1:1 ratio.
This is the same reserve model used by USDT, USDC, PYUSD, FDUSD, and USDG. The specific custodian is different. The regulatory authorization is different. The issuer is different. The reserve structure is identical.
US Treasury bills are interest-bearing instruments. They generate returns through interest payments from the US government. US dollar deposits in conventional banking institutions earn interest. Cash equivalents generate returns through money market mechanisms. The entire reserve infrastructure that makes RLUSD stable and redeemable generates income through interest-based financial mechanisms.
This is the most important clarification for Muslim investors who already hold XRP and trust Ripple's broader ecosystem.
XRP and RLUSD are fundamentally different types of assets with fundamentally different financial structures.
XRP is a payment and settlement cryptocurrency. Its value comes from its utility in cross-border payment corridors and its adoption by financial institutions as a bridge currency. It generates no interest income. It has no interest-bearing reserves. It creates no debt obligations. Its compliance profile was evaluated based on what XRP actually does, which is facilitate genuine payment and settlement activity, and it passed all red lines on that basis.
RLUSD is a stablecoin. Its value comes from maintaining a fixed 1:1 peg to the US dollar through a reserve of interest-bearing financial instruments. The stability that makes RLUSD useful is funded by and dependent on interest income from Treasury bills, bank deposits, and money market instruments.
These are two completely different financial structures. The fact that both are issued or associated with Ripple does not make them the same from an Islamic finance perspective. Islamic finance evaluates the specific financial structure of each instrument individually, not the reputation or trustworthiness of the issuer.
Trusting Ripple as a company is not the same as finding RLUSD permissible under Islamic finance principles.
RLUSD's regulatory authorization from the New York Department of Financial Services is one of the most rigorous stablecoin approvals available in the United States. This is genuinely positive from a conventional financial risk perspective. It means the reserves are verified, the issuance is regulated, and the token operates within a strong legal framework.
But Islamic finance does not evaluate financial products based on their regulatory authorization. It evaluates them based on the financial structure, meaning the mechanisms through which value is created, stored, and distributed.
The NYDFS requires stablecoins to be fully backed by high-quality liquid assets. US Treasury bills and bank deposits are high-quality liquid assets by conventional regulatory standards. They are also interest-bearing instruments by Islamic finance standards. The regulatory approval confirms the reserve structure. It does not change what that reserve structure is or where its income comes from.
Being well-regulated does not make a financial product halal. It makes it trustworthy within the conventional financial system. These are different things.
By this point in CoinStudy's analysis series, Muslim investors deserve a direct and honest conversation about the consistent pattern across stablecoin assessments.
USDT is Haram due to interest-linked reserves. USDC is Haram due to interest-bearing reserves managed by Circle. DAI is Haram due to its debt-based creation mechanism with stability fees functioning as interest charges. PYUSD is Haram due to US Treasury bills and cash-equivalent reserves. FDUSD is Haram due to the same Treasury bill-backed structure. USDG is Haram due to Treasury instruments, bank deposits, and money market assets. RLUSD is Haram due to US dollar deposits, US Treasury bills, and cash equivalents.
Seven stablecoins. Seven Haram classifications. Different issuers, different regulatory authorizations, different blockchains, different levels of institutional credibility. The same fundamental problem.
This is not a coincidence. It reflects a genuine structural reality. The most common and proven methods of creating a stable digital dollar all involve interest-based financial mechanisms in some form. The halal stablecoin problem is real, significant, and not yet solved in the mainstream market.
RLUSD's reserve assets generate returns through interest income. US Treasury bills pay interest to their holders. Bank deposits earn interest from the banking system. Cash equivalents generate returns through money market mechanisms. The entire reserve structure that makes RLUSD stable and redeemable depends on and generates interest-based income.
This is Riba. The interest income generated from these reserves is how the custodial infrastructure behind RLUSD is sustained and how the reserve assets themselves generate returns. The stability that makes RLUSD useful is funded by prohibited financial mechanisms.
The Treasury bills, bank deposits, and cash equivalents in RLUSD's reserves generate predetermined guaranteed interest returns. These are not variable returns tied to productive economic activity. They are predetermined percentage-based returns on the capital held in the reserve assets, constituting guaranteed interest income at the institutional reserve level.
RLUSD functions as a synthetic dollar token representing a claim on an interest-bearing reserve pool. Its value and stability are entirely dependent on the continued performance of these interest-generating reserve assets. The token is economically a synthetic interest-bearing instrument whose dollar peg is maintained through interest income, regardless of what the token itself is called or how it is used by end users.
Ecosystem Riba Exposure — ❌ Failed. RLUSD reserves include US dollar deposits, US Treasury bills, and cash equivalents that generate interest income funding the reserve management infrastructure maintaining the dollar peg.
Guaranteed Interest — ❌ Failed. Treasury bills and cash equivalents in RLUSD's reserves generate predetermined guaranteed interest returns constituting guaranteed interest income at the institutional level.
Synthetic Interest Products — ❌ Failed. RLUSD functions as a synthetic dollar token whose stability is entirely dependent on interest-bearing reserve assets, functioning economically as 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 and unambiguous.
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
This comparison is worth providing directly since Muslim investors frequently ask about both.
XRP scores 86 out of 100 Halal. Its value comes from payment utility and institutional adoption. No interest mechanism. No interest-bearing reserves. No debt-based financial structure. Clean compliance profile with centralization and governance concerns honestly reflected in the score.
RLUSD is Haram. Its value comes from maintaining a dollar peg through interest-bearing reserve assets. Three red-line failures. No Layer 2 scoring available. The Ripple association does not transfer XRP's compliance profile to RLUSD.
Muslim investors who hold XRP based on its genuinely positive compliance profile should understand clearly that using or holding RLUSD is a completely separate decision governed by completely different compliance considerations. The two assets are not interchangeable from an Islamic finance perspective.
Muslim investors who participate in Ripple's payment ecosystem, use the XRP Ledger for transactions, or engage with Ripple-adjacent platforms will encounter RLUSD as a liquidity and settlement tool within that ecosystem.
The consistent Haram classification of major stablecoins creates a genuine and practical challenge. The answer is not to use Haram stablecoins and rationalize it as necessary because they are integrated into otherwise permissible payment infrastructure. The answer is to seek genuinely Sharia-compliant stable value alternatives where they exist, and to advocate for their development within the Islamic fintech space.
The presence of RLUSD within Ripple's ecosystem does not affect XRP's compliance profile. Muslim investors can hold XRP and participate in XRP-based payment activity while avoiding RLUSD specifically as an interest-backed stablecoin.
CoinStudy's HCS methodology classifies RLUSD as Haram based on the structural Riba concerns in its reserve backing. The Treasury bills, bank deposits, and cash equivalents that maintain its dollar peg are interest-bearing 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, the issuer commits the prohibited act by holding Riba-generating reserves. That sin belongs to the issuer. The Muslim who uses RLUSD purely for payment settlement is not holding Treasury bills, not earning interest, and not committing the prohibited act themselves.
CoinStudy's Shariah Board Chairman Dr. Mufti Usman Quddus has confirmed this position directly for structurally similar stablecoins: "Its use as a digital currency is correct. If used in halal means the profit will be halal, and if used in haram dealings it will be haram."
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 RLUSD purely as a medium of exchange for payments and do not earn or seek yield from it, 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.
Before using any stablecoin regardless of who issues it, ask yourself honestly.
What exactly backs this stablecoin and do those reserve assets generate interest income? Is the reserve structure dependent on conventional banking instruments including Treasury bills and money market products? Does the company issuing this stablecoin earn returns from interest-bearing assets? Are there genuinely Sharia-compliant alternatives that serve my practical need for stable digital value in the payment ecosystem? Am I using this stablecoin purely as a transactional medium or am I seeking yield from it?
These questions apply equally to RLUSD, USDT, USDC, and any future stablecoin that enters the market. The issuer's regulatory standing matters less than the financial structure underneath.
Ripple USD (RLUSD) is classified as Haram / Non-Compliant under the CoinStudy Halal Crypto Standard.
Its reserve backing system relies on US dollar deposits, US Treasury bills, and cash equivalents that generate interest income. Three Sharia red lines are triggered, specifically Ecosystem Riba Exposure, Guaranteed Interest, and Synthetic Interest Products, resulting in an automatic Haram classification.
Ripple's reputation, NYDFS regulatory authorization, and dual-chain availability on XRP Ledger and Ethereum are genuinely positive from a conventional financial risk perspective. But they do not resolve the fundamental Sharia compliance issue built into how RLUSD is backed and maintained.
For Muslim investors, RLUSD's interest-linked reserve structure makes it incompatible with Islamic finance principles, regardless of how trusted Ripple is as a company or how strongly XRP itself scores in our analysis. The instrument is different. The ruling is different.
The ruling above reflects CoinStudy's structural assessment. Our Shariah Board Chairman has confirmed that using structurally similar stablecoins purely as a medium of exchange in halal transactions is permissible for that individual under his scholarly assessment. If you use RLUSD only for payment settlement in halal contexts and do not earn yield from it, please consult a qualified Islamic scholar for personal guidance specific to your usage.
Read detail analysis of following coins here:
Is XRP Halal?
Is USDT Halal?
Why USDT and other stablecoins are Haram if FIAT is not?
Learn Halal Trading Strategies with CoinStudy Partner
Halal Staking with Sharia Compliant Validator & CoinStudy Partner
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.
