What is Money in Islam

Islamic Money

Money means different things depending on who you talk to. In Islam, money is a medium of exchange used to purchase goods and services. It is not loaned to make a profit. Specifically, gold and silver were established as money in Islam. Other commodities with an intrinsic value and storability such as dates and barley have also been used as a currency by Muslims. But clearly, gold and silver are more long standing currencies because they will never stale like food items may in the very long run. 

Gold is not just an Islamic favorite. It's important to remember that gold has been recorded being used as money as far back as 550 BC in Lydia which is present day Turkey. In fact, the world was using the gold (at least to back up our paper currency) up until the United States went off the gold standard in 1973. There is no need to spell out the wild fluctuations the global economy has been dealing with since. 

Today, the central bank can print as much of the fiat currency as they want. We all accept this valueless paper as money simply because someone else will accept it, even though it is backed by nothing nor does it have any intrinsic value. 

We've been hoodwinked! 50 years ago, we all used paper currency that was backed by gold. Today, we blindly accept paper and allow our central bank to continue printing it. 

Why is this important?

Unless you start purchasing some precious metals, you really don't have any money. What ever is in your bank account is really a digital record until you try to take it out. If there is any serious event causing people to make a run on the banks, you'll never get your hands on what ever you thought was in there. Given the recent events unfolding both politically and observing how people acted in the stores when COVID initially broke out, I wouldn't "bank" on people acting calmly. I'm pointing this out is to urge people to start buying some portion, no matter how small it is, of gold and or silver. Each paycheck you get, pay yourself back with a little bit of real money. 

What evidences do we have that gold and silver are money in Islam? 

1.  Allah made Zakat (charity to the poor) was made obligatory in gold and silver. The nisab, which is a threshold amount above which incurs a 2.5% obligatory payment of Zakat / charity. The nisab is set by Allah swt at 3 ounces of gold.  This is an indication that gold is money in Islam. 

2. The Prophet of Islam, Muhammad (saws) exclusively used gold and silver as the unit to measure the worth of commodities, goods and services. During his time as the Prophet, he established the practice of basing all transactions such as trade and marriage in gold and silver. This is considered a practical evidence by the sunnah or way of the Prophet of Islam that gold is money. 

3. Rules linked to money were specified gold and silver. For example: "The blood money for one soul would be 100 camels... and for those who deal in gold, it would be 1000 dinars." Another example is the specific amount that someone would have to steal above in order to incur the punishment of losing a hand. 

4. The historic monetary transactions in Islam are reported to be transacted in gold and silver.  

5. Ayat (verses) are in the Quran indicating money is gold and silver. You can find gold and silver mentioned in the Quran in Surah Imran, Yusuf, and Tawbah. 

6. There are recorded sayings, hadith, of the Prophet Muhammad (saws) talking about money as gold and silver. 

"Trade gold for silver as you wish but hand to hand (without delay). At-Tirmidhi

"Gold for silver would be Riba, unless it was hand to hand (without delay)." Bukhari

Why is it important that gold and silver are used as money in Islam? 

Islam seeks to bring stability and security across all aspects of society. Using money that has its own intrinsic value is foundational in establishing security and fairness in society. We can see from the evidence of how stable the economies were in regard to gold and silver currencies. We know that gold and silver retain their value. So as a Muslim, you can use the good intentions of following the sunnah and adding some stability to your own finances by buying some precious metal bullion. 

-For people who follow Islam, it is important to note that there is currently no truly Islamic nation. However, whether you are living in Canada or Cameroon, having a little gold and silver in a hard time will always help you. 

- If you're thinking for the longer term future, you can pass on your precious metals to your progeny and teach them to add to their savings with gold and silver now. 

-Is it right for the central bank of a country to have such power as to print "money" as they please while causing the nation financial harm? This wouldn't be possible if the dollars printed had to represent real gold or silver. 

-When the value of the currency a person earns with their own sweat diminishes, how is that fair to the worker? 

-Is it fair that very wealthy market movers can manipulate markets to cause other companies to lose money? 

-What about the currency of a sovereign nation. Is it fair that banks can manipulate foreign currency in such a way that it devalues the currency of a target nation? 

Where can you buy gold and silver today? 

You can purchase gold or silver jewelry but I suggest make sure you also buy bullion. It is easier to tell how much you have and the purity is stated right on it. You can go to any gold or silver shop in your locality or shop online. You can find bullion on Ebay and places like APMEX and JM Bullion. 

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