From Gold to Paper: The Applicability of Ribā to Modern Currencies in Shāfiʿī Jurisprudence

This article examines the Shāfiʿī school’s position on ribā in contemporary fiat currencies. It analyzes the definition of ribā, the underlying legal rationale for its prohibition (ʿillah), and engages with historical debates on the valuation of currencies and the applicability of ribā laws to non-gold-and-silver currencies (fulūs). By tracing the evolution of currency within Shāfiʿī jurisprudence from the 9th to the 20th century, the article identifies key trends among Shāfiʿī jurists regarding the legal characterization of bonds and paper money in the late 19th and early 20th centuries. The paper argues that the traditional Shāfiʿī exemption of fulūs from ribā laws is not absolute and does not solely depend on the physical attributes of the currency. Historically, Shāfiʿī jurists have emphasized the subjective value of gold and silver, owing to their longstanding roles as primary mediums of exchange. Furthermore, the potential for future currencies to share a similar legal basis for the prohibition of ribā—akin to that of gold and silver—is acknowledged, reflecting the adaptability of Shāfiʿī jurisprudence to evolving economic conditions.