Trading USDT for other fiat currencies
| Fatwa #2277 | Category: Business & Trade | Country: Zambia | Date: 18th February 2026 |
| Fatwa #2277 | Date: 18th February 2026 |
| Category: Business & Trade | |
| Country: Zambia | |
Question
I purchase USDT by paying in US dollars. After receiving the USDT, I then sell it in exchange for Zambian Kwacha through a physical deal with another person. I follow the same method in Pakistan as well.
I want to clarify that I do not take or give any form of interest (riba) in this process. I am not involved in Bitcoin trading or any other cryptocurrency trading. I do not hold USDT for speculation or investment purposes. My only intention is currency exchange: I give US dollars, receive USDT at an equivalent rate (1 USD ≈ 1 USDT), and then sell that USDT to receive local currency such as Zambian Kwacha or Pakistani Rupees.
My purpose is simply to obtain a better exchange rate compared to the interbank rate, not to engage in gambling, speculation, or interest-based transactions.
I would like to know whether this method of exchanging USD to USDT and then converting USDT into local currency is considered halal or haram according to Islamic principles.
JazakAllah Khair.
Answer
In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.
USDT is a stablecoin that sticks to the US Dollar at 1:1. Whilst this is usually and generally the case, it is not guaranteed to be such. The objective is to have a digital currency that is stable with the dollar and allow users to mitigate risks associated with other cryptocurrencies.[1]
Despite not being legal tender yet, given that some other cryptocurrencies like bitcoin have been recognised as legal tender in some countries, such as El Salvador and the Central African Republic, USDT will be considered to be one of the many fiat currencies we deal with today. As such, they shall be bound by the laws of Sarf applied to fiat currency exchange.
Accordingly, it is permissible to exchange USD to USDT and USDT to Kwacha etc with the following conditions:
- Atleast one currency must exchange hands immediately. The other may be on credit or be immediate.
- If traded on the spot/immediately, any conversion rate is permitted, below or above the market going rate, and both parties are required to take possession of their exchanged currency.
- If traded on credit, such that one side has handed over the currency, but the other side will only do so later, it is necessary to stick to the going rate of conversion. It is not permissible to stipulate any other rate besides that.
We do not know how exactly these currencies are traded on the various platforms that exist. The above conditions will always need to be met in order to make the exchange permissible and Halal.
And Allah Ta’āla Knows Best
Mufti Bilal Pandor
Concurred by
Mufti Muhammad Patel
Darul Iftaa Mahmudiyyah
Lusaka, Zambia
[1] https://coinspaid.com/glossary/what-is-usdt-tether/#is-usdt-the-same-as-usd
https://www.investopedia.com/terms/t/tether-usdt.asp