The three categories of stablecoins
Fully-collateralised fiat stables — USDT, USDC, FDUSD. Each token is (claimed to be) backed 1:1 by cash, T-bills, or near-cash equivalents in the issuer's custody. In the live HalalCrypto no-grey-zone screener, USDT and USDC are currently haram/no-trade because reserve composition, redemption, issuer-income, custody, and gharar concerns are not clean enough for a halal coin verdict.
Yield-bearing stables — USDY, SDAI, sUSDe. The token pays a yield to holders, derived from the issuer parking the collateral in interest-bearing instruments. Failed under riba — Layer 1.
Algorithmic stables — UST (collapsed), some experimental designs since. The peg is maintained algorithmically rather than by collateral. Failed under gharar — the peg-maintenance mechanism is opaque enough that holders cannot reasonably evaluate the risk of de-peg.
Why USDT and USDC are not halal coin verdicts in the live screener
A quote leg is the temporary rail an exchange may require while spot capital sits between trades. Sell BTC for USDT, hold the exchange quote rail briefly, buy ETH with that rail. During that window, the system treats the rail as operational infrastructure, not as a cleared halal investment asset.
What the framework does NOT permit: presenting USDT or USDC as halal coins while the live screener marks them haram/no-trade, holding them as return-seeking positions, treating them as yield products, or earning a 'savings' rate on them. The bot must follow the public coin verdict source of truth.
Why yield-bearing stables fail even with full collateral
USDY (Ondo) and SDAI (MakerDAO) are fully collateralised — that is not the issue. The issue is what the collateral DOES while the token is held: it earns interest, and that interest is passed through to the holder. The holder is, economically, lending money to the issuer in exchange for an interest stream. That is riba, regardless of how the wrapper is labelled.
What this means for the bot
The bot trades against USDT and USDC and only against USDT and USDC. It never holds either as a position outside a trade. It never accepts a yield-bearing stable in the universe.