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
The stablecoin market has never been more crowded.
USDT, USDC, PYUSD, RLUSD, USDG, FDUSD, and now United Stables. Each new entrant promises something distinctive. Better reserves. Stronger regulation. Faster settlement. Lower fees. More transparency. Each one is presented to users as a reliable digital dollar that solves the limitations of what came before.
For Muslim investors, the diversity of stablecoin options does not translate into diversity of compliance outcomes. The fundamental problem with fiat-backed stablecoins is structural and consistent across every issuer. It has nothing to do with the issuing company's reputation, the blockchain the stablecoin runs on, or the payment use cases it serves.
The problem is where the reserves that back every stablecoin sit and what those reserves do while they wait to back redemptions.
We ran United Stables (U) through the full CoinStudy Halal Crypto Standard (HCS) methodology. Here is the complete picture.
United Stables (U) 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 payment utility is real. The infrastructure is functional. But the reserve structure that makes U stable and redeemable is built on interest-bearing financial instruments. That structural reality does not change based on how the stablecoin is branded or what it is used for.
United Stables is a fiat-backed stablecoin designed to maintain a stable value of one US Dollar. It is built to support digital payments, remittances, cross-border value transfers, trading liquidity, blockchain-based settlements, and general stable-value transactions across crypto ecosystems.
The U token functions as a digital dollar, providing the price stability that pure cryptocurrencies like Bitcoin and Ethereum lack, while remaining on a blockchain with 24-hour availability, fast settlement, and borderless transferability.
Like every major fiat-backed stablecoin, U maintains its peg by holding reserves that are equivalent in value to the outstanding token supply. When users want to redeem their U tokens for dollars, the issuer uses these reserves to fulfill that redemption.
The reserve structure is therefore not a peripheral detail. It is the foundational mechanism that makes the token function. And it is where the compliance failure is located.
United Stables maintains its dollar peg through reserves held by regulated custodians and financial institutions. These reserves consist of cash deposits in conventional banking institutions, US Treasury bills and other short-term government debt securities, money market instruments and cash equivalents, and similar conventional financial assets that are readily liquid and highly reliable from a credit risk perspective.
For every U token in circulation, equivalent value is held in these reserve assets, ensuring that holders can always redeem their tokens for dollars at the 1:1 ratio.
The mechanism is identical to how USDT, USDC, PYUSD, RLUSD, and USDG operate. The specific custodian, the specific regulatory jurisdiction, and the specific blockchain may differ. The reserve model is the same.
US Treasury bills pay interest to their holders. Bank deposits earn interest from the banking system. Money market instruments generate returns through interest-based mechanisms. The entire reserve infrastructure that makes U stable and redeemable generates income through interest-based financial mechanisms as a matter of standard and unavoidable operation.
This principle has appeared consistently across every stablecoin CoinStudy has analyzed and it deserves clear statement here.
Placing an asset on a blockchain does not change the financial nature of that asset or what it does while it exists. A US Treasury bill held in a bank account generates interest income. A US Treasury bill represented in a stablecoin reserve also generates interest income. The blockchain representation of the reserve does not eliminate or transform the interest income that the underlying asset generates.
Some investors argue that because stablecoin holders do not personally receive the interest income from the reserves, they are not personally earning Riba. The issuer receives the interest income and uses it to fund operations. Holders merely use the token for transactions and receive only the dollar value upon redemption with no contact with the interest-bearing assets themselves.
CoinStudy's Shariah Board acknowledges this argument and the genuine scholarly discussion it represents. Our chairman has confirmed that using dollar-pegged stablecoins purely as a medium of exchange for halal transactions may be permissible for that individual based on the principle that the sin of a prohibited act belongs to the actor who performs it, not to every person who subsequently uses the resulting product.
However CoinStudy's structural classification methodology evaluates whether the reserve mechanism itself involves interest-bearing instruments. United Stables' reserve assets generate interest income as a defining feature of how they operate. This structural reality triggers three red-line failures regardless of how the token is used by individual holders.
Muslim investors who have followed CoinStudy's stablecoin analysis series will recognize an entirely consistent pattern.
USDT is Haram due to interest-bearing reserves consisting of US Treasury bills, bank deposits, and money market instruments.
USDC is Haram due to the same interest-bearing reserve structure managed by Circle.
PYUSD is Haram due to US Treasury bills and cash-equivalent reserves managed by PayPal.
RLUSD is Haram due to US dollar deposits, US Treasury bills, and cash equivalents managed by Ripple's Standard Custody subsidiary.
FDUSD is Haram due to Treasury bill-backed reserve structure.
USDG is Haram due to Treasury instruments, bank deposits, and money market assets.
United Stables (U) is Haram due to the same interest-bearing reserve model that all conventional dollar-pegged stablecoins share.
Seven stablecoins. Seven Haram classifications. Different issuers, different blockchains, different regulatory frameworks, different levels of reserve transparency. The same fundamental problem.
This consistency is not coincidental. It reflects a genuine structural reality. The most proven and widely used methods for maintaining a stable dollar peg in the current financial system all involve holding interest-bearing financial instruments as reserves. This is not a design choice that any individual stablecoin issuer has uniquely made. It is the standard model for how fiat-backed stablecoins work globally.
The search for a genuinely halal stable value option must therefore look at fundamentally different reserve structures rather than evaluating variations within the conventional fiat-backed stablecoin model. Physical commodity backing through gold or other real assets represents a different approach that CoinStudy has found more defensible, as reflected in the Halal classifications of PAX Gold at 86 out of 100 and Tether Gold at 81 out of 100.
United Stables' reserves generate interest income through US Treasury bill interest payments, bank deposit interest rates, and money market instrument yields. This interest income is what makes the reserve assets attractive and viable as backing for the stablecoin. Without the interest income these assets generate, the economic model of holding billions of dollars in reserve to back stablecoin issuance would be fundamentally different.
The stability of U and its redemption guarantee both depend on and are sustained by interest-generating reserve assets. The interest is not incidental to the reserve structure. It is embedded in how the reserve assets function.
US Treasury bills and cash equivalents in U's reserves generate predetermined interest returns. These are among the most reliably interest-bearing financial instruments available in the conventional financial system, which is precisely why stablecoin issuers prefer them. Their predictable interest income at defined rates constitutes Guaranteed Interest income at the institutional reserve level that CoinStudy consistently identifies as a red-line failure across all stablecoin analyses.
United Stables is designed as a payment and settlement instrument rather than a speculative financial product. The stablecoin itself is not a gambling mechanism. Maysir is not the driver of the Haram classification here. Riba is. The distinction matters because it clarifies precisely what the compliance problem is.
Ecosystem Riba Exposure — ❌ Failed. U's reserves consist of US Treasury bills, bank deposits, and money market instruments that generate interest income constituting the foundational backing for the token's dollar peg and redemption guarantee.
Gambling and Betting — ✅ Passed.
Haram Industry — ✅ Passed.
Guaranteed Interest — ❌ Failed. Treasury securities and cash equivalents in U's reserves generate predetermined interest returns constituting guaranteed interest income at the institutional reserve level that maintains the token's stability.
Synthetic Interest Products — ❌ Failed. U functions as a synthetic dollar token whose entire stability mechanism depends on interest-bearing reserve assets, constituting a synthetic instrument whose dollar peg is maintained through interest income from conventional government debt and banking instruments.
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
This is the question most practical stablecoin users will ask, and it deserves direct and honest engagement consistent with how CoinStudy has addressed this question across our entire stablecoin series.
CoinStudy's structural classification is Haram based on the three red-line failures identified above. The reserve mechanism generates interest income regardless of user intent or usage pattern.
However CoinStudy's Shariah Board acknowledges a significant scholarly disagreement on this question. Our chairman has confirmed for structurally similar stablecoins that using dollar-pegged stablecoins purely as a medium of exchange for halal transactions may be permissible for that individual. The reasoning is that the sin of holding Riba-generating reserves belongs to the issuer who holds them, not to the individual who uses the resulting stablecoin for payment settlement without personally receiving or seeking interest income.
If you use United Stables purely as a medium of exchange for legitimate payment transactions in halal contexts and do not seek any yield or interest income from it, consult a qualified Islamic scholar for personal guidance on your specific usage. CoinStudy answers the structural question. The usage question requires personal scholarly guidance specific to your situation.
The structural prohibition and the potential individual usage permissibility are two different questions that can have different answers within the Islamic scholarly tradition.
Before using or holding any stablecoin, ask yourself honestly.
What specific assets back this stablecoin and do those reserve assets generate interest income as a defining feature of how they operate? Is the issuing company earning interest income from the reserves held to back the token regardless of whether that income is passed to holders? Am I using this stablecoin purely as a payment medium for halal transactions or am I holding it as a financial asset with interest income implications? Are there alternative stable value options with more Sharia-compliant reserve structures available for my specific needs? Have I consulted a qualified Islamic scholar for personal guidance on my specific stablecoin usage?
These questions apply equally to United Stables, USDT, USDC, and every future stablecoin that enters the market.
United Stables (U) 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. The reserve backing structure relies on US Treasury securities, cash deposits in conventional banking institutions, and money market instruments that generate interest income as a defining feature of how those assets operate.
The payment utility is genuine. The infrastructure serves real user needs for stable value in blockchain transactions. The regulatory framework may be sound. But none of these qualities change the reserve structure or what it does.
For Muslim investors, United Stables continues the entirely consistent pattern CoinStudy has documented across seven major dollar-pegged stablecoins. The structural problem is not unique to United Stables. It is the standard operating model for fiat-backed stablecoins globally. Solving the halal stable value problem requires a fundamentally different reserve approach, not a new issuer using the same interest-bearing reserve model with different branding.
Our Shariah Board Chairman Dr. Usman Quddus has confirmed for structurally similar stablecoins that using them purely as a medium of exchange in halal transactions may be permissible for that individual based on established Islamic jurisprudence principles. This scholarly position is genuine and represents one side of an ongoing scholarly discussion. If you use United Stables only for payment settlement in halal contexts without seeking any yield or interest income, please consult a qualified Islamic scholar for personal guidance specific to your usage. The structural Haram classification and the individual usage question are two separate issues that can have different answers.
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.
