Paper Currency has the Same Legal Status as Gold and Silver so the Same Rules Apply

*Salaamun 'alaykum wa rahmat-ul-lahi wa barakātuh* 

```Paper Currency has the Same Legal Status as Gold and Silver so the Same Rules Apply — by Shaikh Ibn Bāz```

_In the name of Allaah, the Entirely Merciful, the Especially Merciful, and may peace and blessings be upon the Messenger of Allaah (ﷺ) ._

_🎙️Al-Imām Ibn Bāz said:_

The currencies that are in circulation today are regarded by the scholars as having the same legal ruling as gold and silver—whether they are dinars, dollars, Saudi riyals, British pounds, Jordanian dinars, Iraqi dinars, or anything else besides these. Their ruling is the same as that of gold and silver. So they are not to be sold for payment to be received later; rather, they must be exchanged hand-to-hand, there-and-then without delay. And they are not to be sold with any increase or decrease in amounts when they are of the same currency; instead, they must be equal.

*So if, for example, a person purchases US dollars with Saudi riyals hand-to-hand, then there is no problem with that. However, if the payment is delayed, then it is not allowed because the Messenger ﷺ forbade ribā and said:*

إنما الربا في النسيئة

*“Indeed ribā is in delaying (nasee’ah).”*

These currencies have been placed in the same category as gold and silver. These modern currencies have taken the ruling of gold and silver.

Therefore, there is no harm if you buy British pounds, Egyptian pounds, Jordanian dinars, or other than these, or US dollars, using another currency—so long as it is hand-to-hand, just as one would buy [gold for silver] hand-to-hand. But do not purchase these with delayed payments. 

Do not say: *“I will buy US dollars from you for such-and-such to be paid later,” thereby making it a commodity; or “I will buy British pounds or Jordanian dinars for such-and-such to be paid later”; or “I will buy one thousand Saudi riyals for such-and-such dollars to be paid later.” No. However, hand-to-hand, with immediate exchange, then there is no harm.*

So exchanging one currency for another currency hand-to-hand is permissible. But do not buy one Saudi riyal for two riyals—no. And do not buy one dollar for two dollars—this is ribā because it is the same type of currency. And do not buy one pound for two pounds, whether instantly or on deferment payment—because that is ribā, since it is the same currency, just as the category of gold and silver.

*However, if they are two different currencies, then there is no harm in taking this for that, hand-to-hand. So you may buy US dollars, for example, with Saudi riyals hand-to-hand if you have a need for dollars; or you may buy Jordanian, Egyptian, or American currency, and the like, with another currency—hand-to-hand (without delaying payment).*

End.

*May Allaah accept our ibaadat and forgive our shortcomings.*

_❞Keep Reminding, for Indeed the ʀᴇᴍɪɴᴅᴇʀ ʙᴇɴᴇꜰɪᴛs ᴛʜᴇ ʙᴇʟɪᴇᴠᴇʀ ❝_

*Allaahu l-Musta'aan*