Riba, and where crypto hides it

Most Muslims can define riba and still walk straight past it in crypto, because almost nothing here is labelled interest.

What riba actually is

Riba is an increase you receive for the passage of time on a loan of money. You hand over 100, you get back 110, and the extra 10 is payment for waiting.

The prohibition is not against profit. It is against earning from the loan itself rather than from work, risk or trade. Profit from buying and selling is fine. Profit from renting out something you own is fine. Profit from lending money is not.

The test that does most of the work

One question: did I part with money and get the same money back plus more, with the return promised in advance?

If yes, it is riba, whatever the product is called.

Where crypto puts it

Lending markets. Deposit a stablecoin, earn 6%. A loan with an increase.

Borrow markets. The same contract from the other side. Paying riba carries its own warning in the texts, not only receiving it.

Funding rates. Perpetual futures charge a periodic payment between the two sides. It is a financing cost on borrowed exposure.

Most things labelled Earn. Exchange savings products lend your coins to somebody else and pay you a cut.

Some stablecoin yields. If the yield reaches you from the issuer's holdings of short term government debt, you are being paid interest at one remove.

What is not riba

Being paid for work is not riba, which is why staking rewards can pass. A fee for a service is not riba, which is why a remittance charge is permissible even when it is large. A rise in the price of something you already own is not riba, because no loan took place.

And lending itself is not the problem. A loan with no increase attached is qard hasan, and far from being discouraged it is one of the better things you can do with money. What the prohibition removes is the increase, not the lending.

In one line: riba is a promised increase for lending money, and crypto sells it under at least five other names.