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Is Tether (USDT) halal?

Questionable

No condition fails, but 4 points remain to be verified or fall under a tolerated case.

Verdict calculated by Halal Bourse's published rules from an investigation of primary sources (project documentation, registers, decisions), conducted on 10/03/2026 and not reviewed by a human.

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The asset

stablecoin Issuer: Tether International, S.A. de C.V. (El Salvador; formerly Tether International Limited, British Virgin Islands).

Digital token launched in 2014, pegged to the US dollar at 1 USDT for 1 USD and backed by the issuer's reserves. About 184 billion tokens are in circulation as of October 2, 2026, mostly on the Tron and Ethereum blockchains.

Why this verdict

  1. Permissible purpose : met. USDT is used to pay, settle and store value in dollars on several blockchains; no main use for gambling, interest-bearing lending or impermissible content is found for the token itself (the issuer's investment of the reserves is addressed in c2).
    • « Tether Tokens enable businesses – including exchanges, wallets, payment processors, financial services and ATMs – to easily use fiat currencies on blockchains. » Tether (FAQ) (2026-10-03)
    • « All Tether tokens are pegged at 1-to-1 with a matching fiat currency and are backed 100% by Tether’s Reserves. » Tether (transparency page) (2026-10-03)
  2. No riba : to be verified or tolerated case. The USDT holder receives no yield, but the issuer invests the reserves in interest-bearing securities and keeps the proceeds: as of June 30, 2026, $114.96 billion of US Treasury bills (61.2% of the $187.75 billion of assets), $25.62 billion of reverse repos (13.6%) and $13.45 billion of secured loans (7.2%), with shares calculated from the amounts in the report.
  3. No gambling : met. The spot purchase is of a token issued at 1 USD per USDT and delivered to the buyer's wallet, priced at 0.9999 USD on October 3, 2026; it is not a bet on a price difference without purchase or delivery.
    • « the purchase price payable by a user for one Tether Token will be one unit of the Fiat currency to which it is pegged » Tether (conditions d'utilisation) (2026-02-26)
    • « title in the Tether Tokens passes from Tether to a verified customer of Tether when Tether initiates transmission of the Tether Tokens » Tether (conditions d'utilisation) (2026-02-26)
  4. No excessive gharar : to be verified or tolerated case. Rights and issuance rules are documented, and the reserves are attested every quarter by BDO (reasonable assurance under the ISAE 3000R standard, as of a given date) and then audited for fiscal year 2025 by KPMG according to the August 13, 2026 announcement; still not verifiable are the audit report, not found published, and the detail of certain assets, and direct redemption is reserved for verified clients (minimum 100,000 USD, fee of 0.1% with a floor of 1,000 USD), with the issuer able to delay or suspend it.
  5. Real ownership : met. USDT can be withdrawn to a personal wallet controlled by the holder's private key, but the issuer can freeze an address and burn the tokens it contains: the function exists in the contract, the terms provide for it, and about $550 million was frozen in 2026 on Iran-linked addresses.
    • « Your Digital Tokens Address and associated User Wallet are controlled by your private key » Tether (conditions d'utilisation) (2026-02-26)
    • « As a standard ERC20 token it can also be sent to any Ethereum address. » Tether (FAQ) (2026-10-03)
  6. No fraud or manipulation : to be verified or tolerated case. The issuer was sanctioned in 2021 by two US authorities for misleading statements about the reserves between 2016 and 2019 (CFTC: $41 million; New York Attorney General: $18.5 million and a halt to all activity with New Yorkers), through settlements concluded without admission of the facts, and a class action linked to the fall in bitcoin in 2017-2018 is still pending in New York; the sources read do not establish any current fraud.
    • « for making untrue or misleading statements and omissions of material fact in connection with the U.S. dollar tether token (USDT) stablecoin » CFTC (press release) (2021-10-15)
    • « The order requires Tether to pay a civil monetary penalty of $41 million » CFTC (press release) (2021-10-15)
  7. Cas toléré : to be verified or tolerated case. l'émetteur place les réserves à intérêt sans rien verser au détenteur

Tolerance case

T3. Stablecoin whose issuer invests the reserves in US Treasury bills, reverse repos and secured loans, earns the proceeds (net operating profit of about $1.50 billion in the second quarter of 2026, driven mainly by Treasury bills and repos) and pays nothing to the holder. The share of interest in the issuer's revenue is not published as a percentage.

Contract security scan

GoPlus security scan of the USDT contract on Ethereum: 15,628,617 holders; top ten wallets excluding exchanges and contracts 43.6%; code published; token on the GoPlus trust list. Signals noted: Minting right: the supply can be increased by the contract owner (is_mintable). The contract owner can modify holders' balances (owner_change_balance). Transfers can be suspended by the contract (transfer_pausable). The contract can freeze addresses (blacklist, is_blacklisted). Reading: Issuer identified (Tether): minting, freezing and suspension are the powers of a stablecoin issuer, exercised at the request of the authorities; they are not rug pull signals under rule A.8, but they are a reminder that the holder depends on the issuer.

Opinions found during the research

Opinions reported as read, named for what they are; they do not enter into the calculation of the verdict.

What could not be verified

Sources read

Other cryptos analyzed

General information: neither investment advice nor a fatwa. Verdict calculated by published rules, from financial statements read automatically and not reviewed by a human. Read the methodology