Fiqhi Ruling on Paper Currency and Its Equivalence to Gold and Silver
✍ Written by: Saudi Fatwa Committee (Fatāwā al-Lajnah ad-Dā’imah)
✦ Question:
What is the ruling if all currencies are considered as equivalent to gold?
✦ Ruling and Explanation
Gold and silver serve as the foundational standards for all these currencies. These currencies are therefore considered their equivalent in Islamic jurisprudence.
✔ When dealing with the same currency, any transaction involving an increase (interest) is not permissible.
✔ In terms of riba (usury), even a single currency is treated as equivalent to gold and silver, and likewise, two currencies (from different countries or of different types) are also their equivalent.
Therefore:
➤ Exchanging the same currency (e.g., riyal for riyal) must be done equally and hand to hand; any increase is prohibited.
➤ Exchanging two different currencies (e.g., dollar for riyal) with a difference in amount is permissible, but it must be on the spot (no credit) — deferred exchange is not allowed.
This confirms that:
✔ In the context of usury, both one currency and two different currencies are treated as equivalent to gold and silver.
(Reference: Ibn Baz – Majmūʿ al-Fatāwā wa al-Maqālāt, 19/169)
