Stablecoins have demonstrated a strong product-market fit among Muslims in developing countries. Engineers, contractors, and freelancers working for international companies increasingly prefer receiving payments in stablecoins to bypass the complexities and delays of traditional remittance services.
Moreover, many Muslim crypto users opt to hold their wealth in stablecoins to shield it from local currency devaluation. The adoption of stablecoins such as USDT and USDC is on the rise across regions like the Middle East, West Africa, Turkey, and the Indian subcontinent—areas with significant Muslim populations—reflecting a clear preference among Muslims to hold and utilize stablecoins.
Over the past year, a new type of stablecoin has emerged and gained traction: yield-earning stablecoins. This category offers users unique benefits: first, the ease of use comparable to USDT and USDC, and second, the ability to generate investment yield while holding the asset. However, the yield from these stablecoins often stems from investments in treasury notes, such as ONDO USDY, which are fundamentally interest-based. This renders them impermissible for Muslims under Shariah law.
Through our work with Muslim crypto users, we have identified a strong demand for Shariah-compliant yield-earning stablecoins. This paper introduces InshAllah USD (iAUSD for short), a stablecoin designed to meet this need. Built on the Goldsand staking protocol, iAUSD offers a solution tailored to this growing market. The detailed mechanics of how it operates are outlined in the sections that follow.
iAUSD aims to become the first halal, yield-earning stablecoin tailored for Muslim crypto users. Fully collateralized stablecoins like USDT and USDC are widely accepted as halal. What sets iAUSD apart is its ability to offer a halal yield while remaining fully Shariah-compliant.
Multiple sources of halal yield can be implemented on-chain, such as real-world assets (RWAs) and decentralized exchange (DEX) liquidity provisioning. In the case of iAUSD, the yield is derived from the productive work of staking. Goldsand has been operating Shariah-compliant staking operations on Ethereum and Solana. By building iAUSD on top of the Goldsand protocol, the halal yield generated from staking can be distributed to iAUSD holders.
iAUSD is fully collateralized by the staked capital within the Goldsand staking protocol. A portion of the yield earned from these staking operations is converted into iAUSD and allocated to existing iAUSD holders.
The core principles guiding iAUSD are as follows:
These principles have shaped the design and implementation of the iAUSD system.