The Preciousness of Gold and Silver in Islam

Published on 2 July 2023 at 18:18

As a religion that not only guides moral values but also economic transactions, Islam has its own unique perspective on the concept of money. One of the most distinctive features of Islamic economics is its recognition of only real money that has intrinsic value. Unlike fiat money, Islamic finance only permits the use of commodities that have worth in themselves and can act as money. This article aims to explain the Islamic viewpoint on currency and explore the significance of using gold and silver as a medium of exchange.

Islam is a religion that emphasizes the importance of justice in both spiritual and economic aspects. Therefore, the concept of money in Islam is based on justice, fairness, and equality. Islamic finance strongly advocates the use of commodities as currency that hold value in themselves, free from fluctuating values and speculation. Therefore, Islam recognizes gold and silver as the only real money. 

In Islam, fiqh (Islamic jurisprudence) is the way to interpret Islamic law, including the laws of transactions and financial contracts. Therefore, the Islamic perspective on currency is not only theoretical but also practical. In Islamic fiqh, gold and silver are accepted as currency to make contracts and transactions, such as buying and selling goods. Moreover, the weight and purity of the gold and silver should be accurate and stable to ensure that it holds its value.

The argument behind using gold and silver as currency in Islam is that these metals hold intrinsic value based on their rarity, non-perishable nature, and usage in industries. In contrast, fiat money, such as paper currency, does not hold any intrinsic value and its worth is based on its perceived value by society. Moreover, fiat money can be subject to inflation, deflation, and manipulation by the government or central banks, which makes it an unreliable and unjust currency. Hence, commodities with intrinsic value ensure a stable and just economy.

In addition to gold and silver, rice, dates, wheat, barley, and salt can also serve as a medium of exchange in Islamic finance, but only in cases of extreme need or shortages of gold and silver. However, bay al salam (forward sale) is prohibited on these commodities, which means they cannot be traded unless they exist physically, not in the form of a promise to provide them in the future. Therefore, the use of these commodities as currency is limited and should not be considered a substitute for gold and silver.

In conclusion, the currency in Islam is based on the intrinsic value of the commodity and not on the perceived value of fiat money. Islamic finance recognizes only gold and silver as real money, and commodities with intrinsic value can also act as money in extreme situations. The principle behind this concept is to ensure justice, fairness, and equality in the financial system, which aligns with the moral values of Islam. Therefore, understanding the Islamic perspective on currency is an essential aspect of Islamic finance and can benefit individuals and society by promoting a just and stable economy.

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