Al Salam Aliykom Mufti,
One of the Shikhs said the below about Tether (USDT). I’ve seen a previous comment for you that USDT is acceptable but with no details.
May I ask you to check the below and let us learn from you is this correct or no? Please excuse him because he said Ether instead of Tether. Thanks.
P.S. I understand that there’s an article here is saying that IFG only use USDT for quick trading but the Shikh below is saying that doing those quick trades considered as a support to them as well since the value of Tether currency is based are composed of 85% commercial papers, usurious deposit certificates, and treasury bills. In other words, its value is derived from transactions that are prohibited in principle.
The ruling on buying Tether:
I have recently received more than one question about the cryptocurrency Tether, and this is an answer regarding the ruling on buying it. I have previously spoken about what is called digital or cryptocurrency, and explained that it cannot be described as money. In fact, it is one of the newly created commodities in our time that is bought or traded for the purpose of speculation, storing money, or transferring it away from government control. I have pointed out that most forms of speculation in it fall under the description of gambling, as it is worthless in itself and its value is derived solely from the demand of those who wish to buy it. These desires may increase or decrease for trivial or non-objective reasons, and as a result, its price changes dramatically, either up or down, without any precedent, which exposes the money of those who speculate in it to great risks. This is the severe usury that Sharia prohibits, and gambling is forbidden for its sake.
As for the currency Tether specifically, it is said that it is not subject to this sharp change in its value because it is fully supported by reserves that contribute to stabilizing its value. It is a stable coin, unlike Bitcoin and its siblings, which are extremely risky and volatile cryptocurrencies. However, the problem is that these reserves on which the value of Tether currency is based are composed of 85% commercial papers, usurious deposit certificates, and treasury bills. In other words, its value is derived from transactions that are prohibited in principle. Therefore, buying it is actually buying a share of this basket consisting of these prohibited transactions. Therefore, it is forbidden to buy it, whether for speculation, storing money, or transferring it. In addition to that, what is rumored about Tether, that each of its currencies is backed by the value of a non-Muslim dollar, some officials of the company have stated that it is backed by only 74 cents.
According to the prosecutor in New York, Tether’s claims that its cryptocurrency is always backed by the US dollar are just a lie. The platform was also hacked in 2017, resulting in the theft of $31 million. Therefore, it is not permissible to deal with it in any way, even if some people claim that it is a safe and stable investment. It is not permissible to engage in any transaction that involves prohibited usurious or fraudulent dealings