Currency trading on the Internet
20-6-2004 | IslamWeb
Question:
I have following query: Is currency trading Halal/ Haram? in Islam? My question will be cleared by the following example. Example: If I buy one EURO against two Dollars, and in my mind I will sell my purchased one EURO when it will be equal to three Dollars. There is an equal chance that in the future one EURO may become equal to one Dollar and I have to face loss of one dollar in this transaction. Following are some other conditions: 1- All these transactions are done through Internet. 2- If I purchase EURO, the conversion rate amount Dollars is immediately deducted from my account. 3- My account is physically held by the financial institution that is supervising all these transactions .4- when I sell my purchase EURO in future, on profit or loss, then my profit is added and loss is deducted from my account balance. All this happens immediately on selling of EURO. 5-I buy EURO today and sell it tomorrow. Waiting for your prompt reply.
Answer:
Praise be to Allah, the Lord of the Worlds; and may His blessings and peace be upon our Prophet Muhammad and upon all his Family and Companions.
Currency trading through internet is permissible if there is no delay in completing the transaction.
The Prophet (Sallallahu Alaihi wa Sallam) said: "Gold for gold and silver for silver should not be exchanged except the same amount by the same amount, and none of the two (gold or silver) should be sold except if available and present and provided it is from hand to hand. Reported by Bukhari and Muslim.
Cash currencies are like gold and silver in rate, so the same ruling applies to them. However, currency trading hand to hand is permissible if the exchange or receipt of the currency takes place in the same meeting.
Receiving money in a transaction is the same as having the amount of purchase debited from the bank accounts immediately.
When the bank gives statement to its customer of an exchange, this is considered as receiving the amount.
In addition to the condition of exchanging hand to hand, there is another condition if the currency is of the same kind, then it should be the same amount, like a dollar for a dollar, and a Euro for a Euro.
But if the two currencies differ in essence, then the only condition is that they just have to be exchanged hand to hand. So, the transactions you describe are permissible.
Allah knows best.