Khutba on Halal Currency

الحمد لله، الحمد لله الذي حفِظ سنةَ حبيبِه بالفقهاء العاملين، والشيوخِ العارفين، نحمده تعالى ونستعينه، ونشكره تعالى ونستغفره ونستغيثه، نعوذ بالله من شرور أنفسنا ومن سيئات أعمالنا، من يهد الله فهو المهتد ومن يضلل فلن تجد له وليا مرشدا، ونشهد أن لا إله إلا الله وحده لا شريك له، له الملك و له الحمد، يحيي ويميت، بيده الخير، وهو على كل شيء قدير،  ونشهد أن سيدنا و مولانا محمداً عبده ورسوله، وحبيبه وصفيه، بلغ الرسالة وأدٌى الأمانة ونصح الأمة، النبي الأمي الذي أرسله الله بالهدى والدين الحق، بشيرا ونذيرا بين يدي الساعة، صلى الله عليه وسلم وعلى آله وأصحابه ومن تبعهم بإحسان إلى يوم الدين.

أما بعد! فيا عباد الله اتقوا الله حق تقاته ولا تموتن إلا وأنتم مسلمون. يأيها الذين ءامنوا اتقوا الله وقولوا قولا سديدا يصلح لكم أعمالكم ويغفر لكم ذنوبكم. ومن يطع الله ورسوله فقد فاز فوزا عظيما. اتقوا الله فيما أمر وانتهوا عما نها عنه وزجر

We have talked in recent khutbas about the fact that the Sunna covers all aspects of our lives, social, financial political, not just how we do wudu and pray. The deen is muamala as well as ibada, and indeed muamala takes up a great deal more of everyday lives than ibada, which is why we find the books of fiqh attaching so much attention to it. Indeed, four fifths of the Mudawanna, the great book of Imam Malik, compiled by Sahnun, is devoted to the rulings relating to transactions, especially those involving trade in all its various different forms. The vast majority of these transactions, however, are no longer being implemented, having been discarded in favour of modern-day business practices dreamt up in the minds of men and almost totally lacking in fairness and equity, built as they are on a basis of riba and gharar. The restoration of these halal, equitable business transactions is one of the primary tasks of the Muslim in the present age, for how can any of us hope for success when our transactions are not right in the eyes of Allah, and everything acquired with them is tainted and unlawful. In a famous hadith transmitted by Muslim, the Prophet mentioned,

الرجلُ يَطيل السفرَ أشعثُ أغبرُ يمد يديه إلى السماء يارب يارب ومطعمُه حرام ومشربه حرام وملبسه حرام وغُذِيَ بالحرام فأنَّى يستجاب لذلك

A man who had travelled so far that he was completely disheveled and covered in dust. This man was raising his hands to the sky in dua, calling out, “My Lord, MY Lord!” But his food was haram, his drink was haram, his clothes were haram, and he had been kept nourished by the haram, so how could his dua be accepted!
For the lawfulness of our food and drink, our clothing and lodging, is not just related to the substances themselves, but how they were acquired. So, if they were not acquired in a manner that is correct and tayyib, they have no chance of meeting with acceptance. The Prophet said,

إن الله طيب لا يقبل إلا الطيب

“Allah is tayyib and only accepts what is tayyib.” A financial transaction involves a minimum of two parties, one providing the thaman, or payment, and the other providing the muthman, or goods. Sometimes the payment is also in the form of goods, but usually it is in the form of money. Thus, money is a vital component for the existence of transactions. It is the great facilitator. It enables goods and resources to go to the places where they are most needed. It is the lifeblood of any healthy, functioning society. It is something that every single one of us, no matter how rich or how poor, comes into contact with and makes use of on almost a daily basis. So, if that money is not lawful, then everything else at a transactional level is also rendered unlawful.
Many Muslims are aware of this and take care to ensure that the source from which their money comes is not unlawful – they take great pains to avoid interest-bearing loans and bank accounts, gambling, companies selling alcohol, criminal enterprises and so on. But the vast majority neglect to look at the money itself. That is true of the ulama, just as much as the common folk. They have just accepted it without looking at its nature, for if they had looked at its nature in its present form they would not be using it so unquestioningly. For even the most superficial study of modern day currency, of paper money, reveals it to be haram.
In its original form, paper money was simply a receipt representing the amount of gold or silver that you have deposited with a particular goldsmith or banker. So a pound sterling actually represented a pound’s weight of sterling. The note in your hand was a promissory note, a debt owed to you by the issuer guaranteeing to pay you, or whoever held the note at any given time, the sum written on it whenever you presented it to them.
But even in that original form, paper currency cannot be considered to be halal, for that would mean that your wealth was being held in trust by non-Muslims, something not acceptable in the deen. In Ahkam al-Quran, in his tafsir of Allah’s Words,

وَمِنْهُمْ مَنْ إِنْ تَأْمَنْهُ بِدِينَارٍ لَا يُؤَدِّهِ إِلَيْكَ إِلَّا مَا دُمْتَ عَلَيْهِ قَائِمًا ذَلِكَ بِأَنَّهُمْ قَالُوا لَيْسَ عَلَيْنَا فِي الْأُمِّيِّينَ سَبِيلٌ وَيَقُولُونَ عَلَى اللَّهِ الْكَذِبَ وَهُمْ يَعْلَمُونَ 

the translation of which is, “There are those among them (i.e. the people of the Book) who, if you trust them with a single dinar, will not return it to you, unless you stay standing over them. That is because they say, ‘We are under no obligation where the gentiles are concerned.’ They tell a lie against Allah and they know it.” Ibn Arabi said,

فائدتها النهي عن ائتمانهم على مال

“The upshot of this aya is that it is prohibited to entrust them with your wealth.” For they are liars and cannot be trusted. They do not keep their word or hold to their agreement, as history shows, for when people in America came to claim their gold, they refused to pay them.
But what if the issuers of the currency were Muslim? Would that make it right, some might ask? The short answer is No, for a promissory note is a debt, and debts may not be transacted with for a number of reasons. The first is gharar, for the Messenger of Allah,

نهى عن بيع الغرر

“forbade any transaction involving danger or uncertainty.” When a debt is transferred from one person to another, a fresh contract or agreement must be drawn up between the debtor and the new creditor, so that the one who buys the debt can receive guarantees that the debtor has the ability to pay and is not going to renege because he is overstretched and has too many obligations, but that never happens with paper money. And the truth is that the debtors in this case, the banks and issuers of the currency, constantly renege and are permanently overstretched due to the fact that every one of them issues many times more currency in paper than they have gold in their vaults. And so, they are not and never will be in a position to honour all their debts and are incapable of guaranteeing them all. When too many people come to collect their debts from a bank at the same time, they call it a ‘run on the bank’ and the bank is forced to lock its doors and shut down.
The second is that it gives rise to riba an-nasi’a, the riba that involves unjustified time delay, whenever the transaction involves gold and silver or imperishable foods for paying with a debt negates the hand-to-hand condition which is essential for all such transactions. 
And the third is the selling of one debt for another, something expressly forbidden by the Prophet, for he,

نَهَى عَنْ بَيْعِ الْكَالِئِ بِالْكَالِئِ

“forbade the sale of something deferred for something deferred.” i.e. a debt for a debt. This sale of a debt for debt happens in the vast majority of transactions involving paper money, for often a promissory note is exchanged for an item plus change, that change also being being in the form of promissory notes.
However, today, paper money has moved on to a new stage. It is no longer, although it may still claim to be, a promise to pay anything. The gold standard has been abolished and the value of paper currency is established solely by dictat – all citizens of any particular country are required by the law of legal tender to accept and honour the currency issued by the government of the land. This type of currency is called fiat currency, derived from the latin word ‘fiat’ meaning ‘let it be’. Among the definitions that exist for fiat money is the following:
“Money that is established by government decree and is not backed by anything other than a government trust. Fiat money has no intrinsic value;”
This is unacceptable in the deen for at least two reasons:
Firstly, because, as Imam Malik tells us, money must be “a merchandise commonly accepted as a medium of exchange,” and a merchandise is something that has an intrinsic value of its own, and whose value is determined by the quantity of it, not by the number written on it. An ounce of gold is still an ounce of gold regardless of whether 10, 20 or 100 is carved into its surface. It is the weight that is important, not the number, to the extent that even an unminted ounce of gold is worth the same as an ounce that has been turned into a coin. The Prophet said,

الذهب بالذهب تِبْرُها وعَيْنها والفضة بالفضة تبرها وعينها

“Gold for gold, whether minted or unminted, and silver for silver, whether minted or unminted.“ 
And secondly, because any means of exchange must be commonly-accepted by the people – it cannot be imposed from above. A government may not force its populace to use one currency as opposed to another, even the gold dinar. The currency that they use is whatever meets with common approval and common consent and that is clearly not the case with paper as the people are forced into using it by their governments to such a degree that a country’s citizens may be imprisoned if they refuse to accept it or use something in its stead that has not been sanctioned. Indeed, in the aftermath of the French revolution, many thousands were executed as a result of not accepting the government-printed currency.
Moreover, if the value of the money in your hands is left in the hands of a third party not directly involved in the transaction, then every transaction made with that money necessarily involves gharar (uncertainty), since the party receiving the money can never be fully sure of the value of what he is receiving. For the third party, the government or the speculators on the currency markets or the banks, can change that value at any time, as we see all too often throughout the world. Governments regularly do this either by printing a whole lot of new money, euphemistically called Quantitative Easing, thereby devaluing the currency in everybody’s hands, or simply by arbitrarily resetting the currency’s value in relation to other currencies. And in the deen of Allah, transactions involving gharar are not permitted, as we made clear earlier.
And if that were not enough, the haram nature of paper money is made even more clear by the fact that using it requires us to discard many of the fiqh rulings relating to buying. selling and exchange, and requires us to reform them in order to ensure that transactions remain just. Thus, modernist reformers, because of their blind acceptance of the modern financial system, have been forced to accept interest in order to offset inflation, and so on and so forth. 
Paper money is clearly not valid in Islam, and its continued use brings all of our transactions into question, and makes almost all our earnings unlawful and hateful to Allah. We cannot continue to stand by and do nothing. We ask Allah to give us the means to rid ourselves and all our transactions of it.

أقول قولي هذا وأستغفر الله لي ولكم ولسائر المسلمين من كل ذنب فاستغفروه إنه هو الغفور الرَّحيم.

الحمد لله الحمد لله رب العالمين، وأشهد أن لا إله إلا الله وحده لا شريك له وأشهد أن محمداً عبده ورسوله، صلى الله وسلم وبارك عليه وعلى آله وصحبه، والتابعين وتابعي التابعين ومن تبعهم بإحسان إلى يوم الدين.

أما بعد! فيأيها الذين ءامنوا اتقوا الله ما استطعتم واسمعوا وأطيعوا وأنفقوا خيرا لأنفسكم. يا عباد الله أوصيكم وإياي بتقوى الله وطاعته وأحذركم وإياي عن معصيته ومخالفته. قال اللَّهِ تعالى في كتابه العزيز بعد أعوذ بالله من الشيطان الرجيم، زُيِّنَ لِلنَّاسِ حُبُّ الشَّهَوَاتِ مِنَ النِّسَاءِ وَالْبَنِينَ وَالْقَنَاطِيرِ الْمُقَنْطَرَةِ مِنَ الذَّهَبِ وَالْفِضَّةِ

Allah says in His Noble Book, the translation of which is, “To mankind the love of worldly appetites is painted in glowing colours: women and children, and heaped-up mounds of gold and silver,” Although it is permissible in the Shariah to use any merchandise as currency, so long as it is accepted by the other party in the transaction, there are two metals that have, historically, always served well to meet this purpose. Those metals are gold and silver and there are a number of factors that make them peculiarly suited to be standards and measures of value, and to serve, when in the shape of coin, the purposes of a circulating medium:
Firstly, as Allah mentions in the aya above, they have been made to seem fine to us. It is a part of the human nature to desire them, lust after them and value them. So, people have always been happy to accept them in exchange for their goods. 
Secondly, due to their chemical makeup, they are extraordinarily durable and longlasting, having the capacity to survive in extremely inhospitable conditions for thousands of years. You do not have to worry about breaking them or wearing them down. Goldhunters are still digging up gold coins from the time of the Romans or pulling them out of the sea.  This hardness and durability also means that they can endure high levels of friction and thus lose little to no weight when rubbed constantly and put into rapid circulation. Contrast this to paper currency that regularly tears and has to be replaced every few decades.
Thirdly, they are rare, thereby keeping their value to weight ratio high, but not so rare as to make it unfeasible to use them as a currency, for there is easily enough gold and silver to cover all the real transactions that are carried out across the globe on a daily basis.
Fourthly, they are highly malleable and can be divided, molded and minted into extremely small pieces (or even melted and put back together) without any noticeable loss of weight or value. This makes it easy to assign specific quantities of them to the value of almost any article or product that is being bought or sold. This malleability also makes them capable of receiving and bearing an official stamp, certifying the weight and degree of purity of any particular coin, thereby facilitating transactions and sparing transacting parties the need to weigh the coins every time they do business.
Fifthly, because they are a metal, an element, they have a uniformity and sameness of quality all over the world, unlike other substances, such as dates, cotton, clothing or even paper. Cotton from Egypt is of a different quality to cotton from elsewhere, whereas gold from South Africa is the same as gold from Russia or anywhere else. Place, time, weather, and damp, have no power to alter its quality – the weight of any specific portion always equates exactly to its value: two grains of gold are always worth exactly twice as much as one. 
Sixthly, they hold their value over time, and keep that value even in times of crisis and trouble, being largely unaffected by fluctuations in supply and demand. A sheep in the time of the Messenger of Allah cost one dinar and a chicken one dirham. How much do they cost today? Almost exactly the same. 
And, finally, and most importantly, it was these two metals, gold and silver, that were the currency used by the Messenger of Allah and the first community. If there was anything more suitable or more pleasing in the eyes of Allah, he would have used it.
It is upon them and nothing else that zakat on money is due, and with them and nothing else that zakat on money may be paid. They are an essential part of our deen and an essential part of the Sunna of the Messenger of Allah, and it is his example that we must follow, not that of apologists, blinded by the illusory power of modern economics.
None of our affairs can ever be set straight until gold and silver once again become our means of exchange and none of our transactions fully lawful. They are the key to freeing ourselves from the yoke of usury that is upon all of our necks. So each and every one of us must act to make that happen, must do whatever is in our capacity. It is fard upon all of us. We ask Allah to give success to all those who are minting the dinar and dirham. And once again make them our primary means of exchange.

إِنَّ اللهَ وَمَلَائِكَتَهُ يُصَلُّونَ عَلَى النَّبِيِّ، يَا أَيُهَا الذِينَ آمَنُواْ صَلُّواْ عَلَيْهِ وَسَلِّمُواْ تَسْلِيماً. 

اللَّهُمَّ صَلِّ وَسَلِّمْ وَبَارِكْ عَلَيْهِ وَعَلَى آلِهِ وَصَحْبِهِ  أَجْمَعِينَ. وَارْضَ اللَّهُمَّ عَنِ الْخُلَفَاءِ الرَّاشِدِينَ أَبِي بَكْرٍ وَعُمَرَ وَعُثْمَانَ وَعَلِيٍّ، وعن أم المومنين عائشة التي أمرنا الله في سورة النور أن ندافع عنها، وَعَنْ سَائِرِ الصَّحَابَةِ أَجْمَعِينَ، خُصُوصاً اِلأَنْصَارَ مِنْهُمْ وَالمُهَاجِرِينَ، وَعَنِ التَّابِعِينَ وَتَابِعِي التَّابِعِينَ وَمَنْ تَبِعَهُمْ بِإِحْسَانٍ إِلَى يَوْمِ الدِّينِ.

اللَّهُمَّ اهْدِ وُلَاةَ أُمُورِ المُسْلِمِينَ لِمَا يُرْضِيكَ وَلِاتِّبَاعِ سُنَّةِ نَبِيِّكَ صَلَّى اللهُ عَلَيْهِ وَسَلَّمَ، وَثَبِّتْ أَقْدَامَهُمْ عَلَى الصِّرَاطِ المُسْتَقِيمِ، وَأَصْلِحْهُمْ يَا رَبَّ الْعَالَمِينَ. 

اللَّهُمَّ بَارِكْ عَلَى شَيْخِنَا، وَعَلَى أَمِيرِنَا، وَعَلَى جَمِيعِ أُمَرَاءِ وَزُعَمَاءِ المُسْلِمِينَ. 

اللَّهُمَّ بَارِكْ عَلَى المُسْلِمِينَ فِي هَذِهِ المَدِينَةِ، وَوَفِّقْهُمْ لِمَا تُحِبُّهُ وَتَرْضَاهُ يَا أَكْرَمَ الأَكْرَمِينَ. 

اللَّهُمَّ أَعِزَّ الإِسْلَامَ وَالمُسِْلمِينَ، وَاخْذُلِ الْكُفْرَ وَالْكَافِرِينَ، وَانْصُرِ المُجَاهِدِينَ فِي سَبِيلِ اللهِ. وَاجْعَلْ كَلِمََتَكَ هِيَ العُلْيَا وَكَلِمَةَ الْكُفْرِ هِيَ السُّفْلَى. 

رَبَّنَا ءَاتِنَا فِي الدُّنْيَا حَسَنَةً وَفِي الآخِرَةِ حَسَنَةً وَقَِنَا عَذَابَ النَّارِ. 

إِنَّ اللهَ يَامُرُ بِالْعَدْلِ وَالإِحْسَانِ وَإِيتَاءِ ذِي الْقُرْبَى، وَيَنْهَى عَنِ الْفَحْشَاءِ وَالمُنكَرِ وَالْبَغْيِ، يَعِظُكُمْ لَعَلَّكُمْ تَذَّكَّرُونَ، وَلَذِكْرُ اللهِ أَكْبَرُ وَاللهُ يَعْلَمُ مَا تَصْنَعُونَ. وَقُومُواْ إِلَى صَلاتِكُمْ يَرْحَمُكُمُ اللهُ.