Is AUSD by Agora Finance halal? It shares yield with partners instead of keeping it like Tether. Does that make it different from USDT?

AUSD is classified as Haram under CoinStudy's Halal Crypto Standard and Agora's revenue-sharing model does not change this classification. Your question identifies a genuine commercial distinction between AUSD and USDT but the compliance conclusion is the same for a precise reason worth understanding clearly.

The reserve structure of AUSD is composed of cash, US Treasury bills, and overnight reverse repurchase agreements. US Treasury bills are interest-bearing government bonds. Overnight reverse repurchase agreements are short-term interest-bearing instruments where one party earns the difference between the sale and repurchase price. This is structurally identical to the USDT and USDC reserve compositions that CoinStudy classifies as Haram due to Ecosystem Riba Exposure. Every AUSD token in existence is backed by assets generating interest income.

Agora's innovation is what happens to that interest income. Tether keeps it entirely. Agora shares it with ecosystem partners. This is a genuine commercial difference that makes Agora's model more equitable and arguably better for the crypto ecosystem. But Islamic finance does not evaluate the fairness of how interest income is distributed. It evaluates the nature of the financial relationship. Interest income shared more broadly across an ecosystem is still interest income. A Riba arrangement that distributes its proceeds to more participants is not made permissible by the breadth of its distribution.

Our Shariah Board Chairman Dr. Usman Quddus reviewed the T-Bill backed stablecoin category and confirmed that the backend structure involves interest-based transactions that require caution. He permitted use as a medium of exchange for permissible transactions while identifying that profit derived from the interest-bearing mechanism is not permissible. AUSD falls under the same ruling as USDT for medium of exchange use, conditionally permissible with caution. But Agora's revenue-sharing model, which explicitly distributes T-Bill interest income to partners, represents participation in the interest-bearing mechanism that the Chairman identifies as the concern.

There is one additional red-line failure for AUSD beyond the reserve structure. Pendle has launched AUSD yield pools that create tradable synthetic claims on future AUSD reserve income. CoreDAO integrations recycle T-Bill yield from AUSD reserves into DeFi liquidity incentives. These specific deployments create Synthetic Interest Products from AUSD positions, triggering a second red line that USDT in its standard configuration does not trigger because Tether does not actively build yield distribution mechanisms into partner ecosystems the way Agora does.

For practical guidance, if you need a dollar stablecoin purely as a medium of exchange for permissible transactions, AUSD carries the same conditional permissibility as USDT per the Chairman's ruling. Avoid any AUSD yield pools, revenue-sharing programs, or DeFi protocols that distribute the T-Bill reserve income to users. The token for transfers is conditionally permissible with caution. Any mechanism capturing or distributing the reserve interest income is Haram.

Read complete AUSD analysis here:
Is Agora Finance Halal ?