Currency in Islam By Mufti Faraz Adam and Mufti AbdulKadir

Ibn Taymiyyah (2005) states that the Sharī‘ah has not defined any specific condition or definition for currency and money, and has instead left it to the ‘urf (prevailing custom) and understanding of the people. Hence, the Hanafī jurists state that assets or commodities become currency by ta’āmul (common usage) and iṣṭilāḥ (social concurrence) (al-Kasani, 1986). Imam Ahmad also opined that currency can be identified by the agreement of the people (Ibn Qudamah, 1997). Muslim jurists state that currency is of two types: natural currency and customary currency. First, natural currency (thaman khilqī) refers to something originally created to serve as a medium of exchange. Gold and silver are examples of natural currency which are created to serve as a medium of exchange. Imam al-Ghazāli (2011) refers to gold and silver as natural currency which Allah, The Almighty, created for mankind to use as a standard and measure to price and valuate commodities. Second, customary currency (thaman ‘urfī) is something adopted by the people as a medium of exchange. Commodity money and fiat currencies are common customary forms of currency. The necessary juristic elements for a currency There are three elements required for any valid currency in Islam: māl (wealth), mutaqawwim (possess legal value) and thamaniyyah. Linguistically, māl in the Arabic language refers to anything which can be acquired and possessed; whether it is corporeal (‘ayn) or usufruct (manfa’ah); examples of this include gold, silver, animals, plants and the benefit derived from assets such as living in homes, driving vehicles, etc. (Wohidul Islam, 1999). Something which cannot be possessed cannot be considered as māl linguistically. For example, birds in the sky, fish in the water, trees in forests are not māl in terms of the Arabic language as they are not in any person’s possession (al-Zuhayli, 1985). According to the Hanafi jurists, māl is “what is normally desired and can be stored up for the time of need”. This definition denotes that the two key criteria for defining māl in the Hanafis’ view are “desirability” and “storability”.Although some Hanafi jurists have stated that māl must be a physical entity, Mufti Taqi Uthmani (2014) dispels this argument and states that the Qur’an and Sunnah have not explicitly defined māl, rather, Sharī‘ah has left it to the understanding of people. Furthermore, he argues that some furu’ (substantive laws) in the Hanafi school discuss intangibles as māl. He thereafter quotes the fatāwā of Hanafi jurists which consider electricity and gas as māl despite being intangible. Thus, intangibles can also be māl on condition that they are desirable and retrievable. Another requirement for māl itself to be exchangeable and tradeable is that it must be mutaqawwim (possess legal value) for transaction to be legally sound (ṣaḥīḥ). Mutaqawwim refers to an item or subject being lawful to use in Sharī‘ah. Thamaniyyah refers to something possessing currency-like features where it is considered as a medium of exchange, a unit of account and a store of value. Thus, if these characteristics are found in a decentralised system, there is nothing to prohibit such a system in Islam. These underpinning principles are the ideals for currency in Islam. The government and ruling authority would have been the most efficient and instrumental in achieving these ideals. Against this backdrop, it seems that classical scholars favoured a centralised system. However, the reality is that the Qur’an and Sunnah have not defined currency, instead, they have left it to the understanding of the people and custom of the people as mentioned by Imam Ibn Taymiyyah. This is a common feature for those aspects of law which are fluid, dynamic and adjustable. Considering that a centralised system is not necessary, Shaykh Abdullah al- Mani’ (1984) states, “Money is thus whatever is agreed to be such, whether by government authority or public practice”. Thus, currency can be determined by centralisation and decentralisation. If a decentralised system can provide benefits similar to that of a centralised system, a medium of exchange can become money through public practice and widespread acceptance.