Quick Verdict
Litecoin (LTC) is PERMISSIBLE to DOUBTFUL — closer to Bitcoin's analysis than Ethereum's. Litecoin's sole use case is peer-to-peer digital payments with no smart contracts, DeFi, or staking. This simplicity makes it one of the cleaner cryptocurrencies from an Islamic perspective.
Why Litecoin Is Simpler Than Most Crypto
Unlike Ethereum and Solana, Litecoin cannot host smart contracts or DeFi applications. It's a pure payment cryptocurrency — you send LTC to someone and they receive it. There are no staking yields, no governance tokens, and no DeFi ecosystem built on it. This eliminates most of the riba-related concerns that complicate other cryptocurrencies.
The Core Question: Is Litecoin a Currency or Speculation?
The same debate that applies to Bitcoin applies to Litecoin: is this a legitimate digital currency (permissible) or pure speculation (impermissible)? Arguments for currency: Litecoin is accepted by thousands of merchants, processes payments in 2.5 minutes, and has been used for real commerce since 2011. Arguments against: most LTC transactions are exchange trading, not commerce.
Litecoin vs Bitcoin for Muslim Investors
If you're comfortable with Bitcoin's Islamic finance status, Litecoin is equally or more permissible. It has a smaller market and less liquidity, but the technology is similar and the use case (payments) is arguably cleaner.
Bottom Line
Litecoin is one of the more halal-friendly cryptocurrencies due to its simple payment focus and absence of DeFi complications. Classify as doubtful (like Bitcoin) and treat as a currency/digital commodity rather than a yield-generating instrument.