Series of Answers by the Eminent Scholar Ata Bin Khalil Abu Al-Rashtah, Ameer of Hizb ut-Tahrir, to Questions from Visitors to his Facebook Page "Fiqhi"
Answer to a Question
To Muhammad Ishak
Question:
Assalamu Alaikum Wa Rahmatullahi Wa Barakatuh,
May Allah bless you and protect you, our Sheikh...
The question: Some thinkers in our country, Indonesia, reject returning to the use of gold and silver currency. They say that the Shari'ah does not command the use of a specific currency, citing as evidence that Umar bin Al-Khattab once intended to make Dirhams from camel hides. Is this opinion correct? Jazakumullah Khairan.
Answer:
Wa Alaikum Assalam Wa Rahmatullahi Wa Barakatuh,
1- We have clarified the Shari'ah evidences regarding gold and silver being the two currencies that the State in Islam must adopt. We detailed this in the books The Economic System and Funds in the Khilafah State... We also clarified the matter in the book Introduction to the Constitution, Volume 2, in Article 167 and its explanation... I will quote for you what was mentioned in the Introduction to the Constitution in this regard for its clarity and smoothness:
(Article 167: The State’s currency is gold and silver, whether minted or not. No other currency is permitted for the State. The State may issue something else instead of gold and silver on the condition that its equivalent in gold and silver is available in the State’s treasury. Thus, the State may issue copper, bronze, paper, or other materials and mint them in its name as currency if they are fully backed by an equivalent amount of gold and silver.
When Islam established the rules of sale (Bay’) and leasing (Ijarah), it did not designate a specific thing for the exchange of goods or the exchange of efforts and benefits as a compulsory basis for exchange. Rather, it left it open for humans to conduct exchange with anything as long as mutual consent exists in this exchange. It is permissible to marry a woman by teaching her sewing; it is permissible to buy a car by working in the factory for a month; it is permissible to work for a person for a specific amount of sugar, and so on. The Shari'ah left the exchange open for human beings with whatever they wish. This is evidenced by the generality of the evidences for sale and leasing:
وَأَحَلَّ اللَّهُ الْبَيْعَ
"Allah has permitted trade" (Surah Al-Baqarah 2:275)
This applies to anything for anything. And the Hadith:
أَعْطُوا الأَجِيرَ أَجْرَهُ قَبْلَ أَنْ يَجِفَّ عَرَقُهُ
"Give the worker his wages before his sweat dries." (Reported by Ibn Majah)
This means the worker is paid his wage when he finishes his work, whatever type of wage it may be. Furthermore, these things used for exchange are not "actions" such that the default rule would be restriction (Taqayyud) requiring evidence for permissibility; rather, they are "things" (Ashya’). The default rule for things is permissibility (Ibaha) as long as there is no evidence of prohibition, and no evidence has prohibited these things. Accordingly, it is permissible to conduct Shari'ah transactions with them—buying, selling, gifting, exchanging—except where a text has prohibited exchange. Based on this, exchanging a commodity for a currency and currency for a commodity is also absolutely permissible, except for exchanging currency for currency, which has specific rules and is restricted by them. Similarly, exchanging effort for currency and currency for effort is absolutely permissible, except for commodities or efforts that have a text prohibiting them.
Based on this, exchanging a commodity for a specific unit of currency, as well as exchanging effort for a specific unit of currency, is also absolutely permissible, whatever that currency unit may be. Whether this unit has no backing at all, like fiat paper money (Nuqud Ilzamiyyah), or this unit has a certain percentage of gold backing like fiduciary paper money (Nuqud Wathiqah), or this unit has an equivalent gold and silver backing exactly equal to its value like representative paper money (Nuqud Na’ibah), exchange is valid in all of them. Therefore, it is valid to exchange a commodity or effort for any specific unit of currency. It is valid for a Muslim to sell for any currency, buy with any currency, lease with any currency, and be a hired worker for any currency.
However, if the State wants to establish a specific currency unit for the lands it rules to implement the Shari'ah rules related to wealth as wealth—such as Zakat, currency exchange (Sarf), usury (Riba), and so on—or the rules related to the owner of the wealth—such as blood money (Diyah) and the threshold for theft (Nisab al-Sirqah), and so on—it does not have a free hand to establish any arbitrary currency unit. Rather, it is restricted to a specific currency unit and is not permitted to establish any other. The Shari'ah has designated a specific unit of currency in a specific metal that the text mentions, which is gold and silver.
If the State wishes to issue currency, it is restricted to that currency being gold and silver and nothing else. The Shari'ah did not leave it to the State to issue any type of currency it desires; rather, it specified the monetary units that the State may establish as its currency if it wishes to issue currency in specific units, which are gold and silver only.
The evidence for this is that Islam linked gold and silver to fixed, unchangeable rules. When it ordained blood money (Diyah), it specified a certain amount of gold for it. When it made amputation mandatory for theft, it specified the amount that warrants amputation in gold. The Prophet ﷺ said in his letter to the people of Yemen:
وَأَنَّ فِي النَّفْسِ المُؤْمِنَةِ مِاْئَةً مِنَ الإِبِلِ، وَعَلَى أَهْلِ الْوَرِقِ أَلْفُ دِينَارٍ
"For a believer's soul, it is one hundred camels, and for the people of silver, it is one thousand Dinars." (Mentioned by Ibn Qudamah in Al-Mughni from what was narrated by Amr bin Hazm from the letter of the Messenger of Allah ﷺ to the people of Yemen). In the narration of An-Nasa'i regarding the letter of the Messenger of Allah ﷺ to the people of Yemen: "And for the people of gold, one thousand Dinars" instead of "the people of silver." And the Prophet ﷺ said:
لا تُقْطَعُ يَدُ السَّارِقِ إِلاَّ فِي رُبْعِ دِينَارٍ فَصَاعِداً
"The hand of a thief shall not be cut off except for a quarter of a Dinar or more." (Reported by Muslim via Aisha, may Allah be pleased with her).
This specification of certain rules by the Dinar, the Dirham, and the Mithqal makes the Dinar (by its weight in gold) and the Dirham (by its weight in silver) a monetary unit by which the values of things and efforts are measured. Thus, this monetary unit is the currency, and it is the basis of the currency. The fact that the Shari'ah linked Shari'ah rules to gold and silver explicitly when these rules relate to currency is evidence that the currency is gold and silver only.
Also, when Allah (swt) mandated Zakat on money, He mandated it on gold and silver only and specified a Nisab (threshold) for it in gold and silver. Considering the Zakat of money in gold and silver determines that the currency is gold and silver.
Additionally, the rules of currency exchange (Sarf), which apply only to monetary transactions, were brought regarding gold and silver alone. All financial transactions mentioned in Islam were based on gold and silver. Sarf is the sale of one currency for another, either the same currency or a different one; in other words, Sarf is selling currency for currency. The Shari'ah’s specification of Sarf—which is a purely monetary transaction—for gold and silver alone to the exclusion of others is explicit evidence that the currency must be gold and silver and nothing else. The Prophet ﷺ said:
وَبِيعُوا الذَّهَبَ بِالْفِضَّةِ وَالْفِضَّةَ بِالذَّهَبِ كَيْفَ شِئْتُمْ
"Sell gold for silver and silver for gold as you wish." (Reported by Al-Bukhari via Abu Bakra; and Muslim reported similarly via Ubadah bin Al-Samit). And he ﷺ said:
الذَّهَبُ بِالْوَرِقِ رِباً إِلاَّ هَاءَ وَهَاءَ
"Gold for silver is Riba except hand to hand." (Agreed upon via Umar).
Beyond that, the Messenger ﷺ designated gold and silver as currency and made them alone the monetary standard to which the measure of goods and efforts is referred. On their basis, transactions were conducted. He made the standard for this currency the Uqiyah, the Dirham, the Daniq, the Qirat, the Mithqal, and the Dinar. All of these were known and famous during the time of the Prophet ﷺ and people dealt with them. It is established that he ﷺ approved them. All sales and marriages were conducted in gold and silver, as established in authentic Hadiths. The fact that the Messenger made the currency gold and silver, and that the Shari'ah linked some Shari'ah rules to them alone, limited monetary Zakat to them, and restricted currency exchange and financial transactions to them; all this is clear evidence that the currency of Islam is gold and silver only.) End of the quote from the book Introduction to the Constitution.
2- Thus, we find the Shari'ah evidences collaborating to indicate that the currency adopted by the State in Islam is gold and silver and that it does not adopt any other currency. Although the Prophet’s ﷺ approval of these two currencies is sufficient on its own to establish the Shari'ah rule regarding currency in Islam, the Shari'ah did not stop at the Messenger’s approval, but went beyond that to establish evidences in the chapters of Usury, Zakat, Blood Money... etc., which indicate the legal consideration of the monetary nature of gold and silver metals as long as these Shari'ah rules exist—meaning until the Day of Judgment. Therefore, there is no way to claim the adoption of any other currency legally.
3- It was narrated from Umar (ra) that he intended to adopt Dirhams made of camel hides. This has been reported, according to our research, through two paths:
Al-Baladhuri narrated in his book Futuh al-Buldan (3/578): Amr al-Naqid told us: Ismail bin Ibrahim said: Yunus bin Ubaid said, from Al-Hasan who said: "People, while they were in a state of disbelief, knew the position of this Dirham among people, so they perfected it and purified it. But when it came to you, you cheated and corrupted it. Umar bin Al-Khattab said: 'I intended to make the Dirhams from camel hides.' It was said to him: 'Then there will be no camels.' So he desisted."
Abd al-Razzaq al-San’ani (d. 211 AH) narrated in his book Tafsir Abd al-Razzaq from Ma’mar and Yahya, from Ayyub from Ibn Sirin, that Umar bin Al-Khattab wanted to strike Dirhams from camel hides, so they said: "Then the camels will perish," so he abandoned it.
Some have tried to use this to prove that it is permissible for the State in Islam not to make its currency gold and silver and to adopt currency from any material agreed upon, like hides and the like... As you mentioned in your question, some people of this era reject returning to the gold and silver standard and approve of fiat paper money, based on their claim of this statement narrated from Umar (ra)... The response to this is from several angles:
a- As we mentioned and clarified earlier, the Shari'ah evidences are collaborative in indicating that the currency in Islam is gold and silver, based on the Prophet’s ﷺ approval and the Shari'ah linking many rules to gold and silver in consideration of their monetary nature... How can all these evidences be left and set aside, and a narration from Umar (ra) be resorted to in order to prove a statement contrary to those established and clear evidences? Is this not a strange matter, far from the correct derivation from Shari'ah evidences?!
b- From the perspective of the chain of narration (Sanad), there is an issue in this narration from both paths through which it was narrated. In both chains, there is a disconnection (Inqita’) because the first narrator from Umar bin Al-Khattab is Al-Hasan al-Basri, and he did not meet Umar (ra) nor take from him, as he was born at the end of Umar’s Khilafah shortly before his death. The narrator in the second narration is Ibn Sirin, and he also did not meet Umar bin Al-Khattab nor narrate from him; it was said he was born at the end of Umar’s Khilafah and it was said during Uthman’s Khilafah... So how is it valid to take these narrations that have a disconnection in the chain against authentic and established Prophetic Hadiths?!
c- The narration of Al-Hasan al-Basri states that Umar bin Al-Khattab (ra) said: ("I intended to make the Dirhams from camel hides"), meaning the matter for Umar did not go beyond being an "intention" (Hamman) to perform the action, and he did not do it... How can we rely on that to permit adopting currency other than gold and silver? That is, how can we rely on a mere "intention" by Umar that was not realized, against evidences from the Noble Qur’an and established evidences from the Messenger of Allah ﷺ in which the determination of currency in Islam is clear? Is this not a strange matter?!
d- The established fact is that the Rightly Guided Khulafah, like the Messenger ﷺ, used gold and silver as currency. That is, the currency used during Umar's (ra) Khilafah was the gold Dinar and the silver Dirham... How can we leave this established and consistent matter during the time of the Prophet ﷺ and the Rightly Guided Khulafah, including Umar, and take a narration saying that Umar (ra) intended to take Dirhams from camel hides? That is, how can we take a narration about his "intention" and leave what is established from his "action" in using gold and silver as the currency during his Khilafah, may Allah be pleased with all the Sahaba?
Thus, it becomes clear that using the statement narrated from Umar (ra) as evidence is out of place and does not stand as evidence for the claim that Islam did not specify a currency for the State to adopt, nor is it suitable to oppose the stronger and more established evidences...
4- In addition to what is mentioned above, abandoning the gold and silver standard in the world and adopting fiat papers has resulted in many large-scale harms, such as the fluctuation of exchange rates, the US dollar's control over the markets, the damage to the currencies of weak countries, and the sharp decline in their purchasing power... etc., of the harms known to anyone who follows monetary, financial, and economic matters... Getting rid of these harms and the control of the major capitalist countries, especially America, cannot be achieved except by returning to the gold and silver standard and adopting them as currency, and dragging the world to adopt them as currency to remove those harms arising from the dominance of the paper currency of the colonialist Kafir states and the control over the global economy, especially by America... And the Khilafah State is the state qualified to do that, by Allah’s permission...
All of the above clearly illustrates the obligation for gold and silver to be the Shari'ah currency of the Khilafah State and nothing else... And Allah is All-Knowing and All-Wise.
Your brother, Ata Bin Khalil Abu Al-Rashtah
24 Muharram Al-Haram 1442 AH Corresponding to 12/09/2020 CE
Link to the answer from the Ameer’s Facebook page: Facebook
Link to the answer from the Ameer’s website: Web