Status of our currency

Q: What is the status of our currency i.e. rands and dollars? Is it thaman (money) or mabee’ (sale commodity)? In other words, what is the Islamic position on fiat money which is the currency of the majority of the world today? Some say that it is haraam and riba as the money of the Quraan Majeed and Sunnah is gold dinars and silver dirhams which have “intrinsic value”, while today’s money is backed by interest. What is the proof in the Quraan Majeed and Sunnah?

A: Ulamaa have allowed it and recognise it as money (thaman-e-urfi). Hence, it is permissible to use the various currencies.

And Allah Ta'ala (الله تعالى) knows best.

وثمن باصطلاح وهو سلعة في الأصل كالفلوس فإن كانت رائجة فهي ثمن وإلا فسلعة (البحر الرائق 6/221)

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)