Muslim Scholars Views on Fiat Money
DOI:
https://doi.org/10.11113/umran2026.13n1.810Keywords:
Contemporary Scholars, Concept, Fiat Money, Federal Reserve BankingAbstract
This paper critically examines the nature and implications of fiat money through the lens of contemporary Muslim scholars. The objective of this study is to evaluate the legitimacy, sustainability, and ethical dimensions of fiat money, which defined as currency without intrinsic value and upheld solely by government devree, in light of Islamic principles. The methodology employed in this study consists of unstructured interviews with five key figures in the field of Islamic economics and monetary thought, namely Dr. Ugi Suharto, Prof. Dr. Ahmed Razman Abdul Latiff, Prof. Dato’ Dr. Ahamed Kameel Mydin Meera, Dr. Yahia Abdul-Rahman, and Ahmad Yani Ismail. The findings reveal a strong consensus that while fiat money functions as a medium of exchange, it is inherently unstable and incompatible with the Islamic principles of justice, transparency, and value rooted in real assets. Most of the scholars emphasize the dangers of money creation through fractional reserve banking, the systemic injustices embedded in fiat-based financial systems, and the inadequency of current Islamic legal rulings to address these challenges. The contribution of this study lies in highlighting the urgent need to re-examine the metaphysical foundations of money and to develop alternative systems grounded in real value and moral accountability. By situating fiat money as not merely a technical instrument but a moral construct with far-reaching societal consequences, the paper underlines the importance of cultivating deeper scholarly expertise in monetary theory within the Muslim world to navigate and reform contemporary financial monetary structures.
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