Shar‘i Ruling on Online Currency Exchange❖ Question:
Is online currency exchange—such as converting Pakistani Rupees to US Dollars—permissible in Shari'ah?
❖ Answer by: Fadhilat al-‘Ālim Ḥāfiẓ Qamar Hasan (Hafizahullah)
◈ Ruling:
If the transaction is conducted hand-to-hand, meaning payment and receipt occur simultaneously, then such a transaction is Shari‘ah-compliant and permissible.
Explanation:
- In currency exchange, both currencies are considered Ribawi items (liable to interest if not exchanged properly).
- According to Islamic law, when exchanging different currencies, it must be done on the spot to avoid Riba (interest/usury).
- Delayed transactions or non-immediate settlement would make the deal invalid and impermissible.
Conclusion:
✔ Online currency exchange is permissible under Islamic law only if both the payment and receipt are executed instantly (spot transaction).
✘ Any form of delay or credit-based exchange would make the transaction non-compliant with Shari‘ah.
