Narrated Alqamah bin Abdullah: On the authority of his father, who said: The Messenger of Allah ﷺ forbade to break the coins of the Muslims current among them except for some defect.
Related hadith on this topic
Explanation & Benefits
Shaykh Umar Farooq Saeedi
Benefits and Issues:
Benefit:
This narration is weak in its chain of transmission.
And what is meant by it is that it is not permissible to melt down coins that have been officially minted by the government into ordinary metal.
It has also been observed that some people use coins in ways other than as currency (medium of exchange).
All of this is not correct.
Because this causes difficulty for people in transactions.
Damaging currency notes is also an extremely reprehensible act.
Source: Sunan Abu Dawood – Commentary by Shaykh Umar Farooq Saeedi, Page: 3449
Maulana Ataullah Sajid
Benefits and Issues:
This narration is weak; however, it is correct that a gold dinar or a silver dirham that is valid and with which buying and selling can be conducted in the market, it is not permissible to melt it down and make a gold or silver ingot from it, because this disrupts the fulfillment of a need that is being met for the general Muslims. However, if there is a reasonable cause, for example: if the coin is counterfeit, then it can be broken and melted.
Source: Commentary on Sunan Ibn Mājah by Mawlānā ‘Atā’ullāh Sājid, Page: 2263