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International Journal of Academic Research in Business and Social Sciences

Open Access Journal

ISSN: 2222-6990

The Issuance and Supervision of Currencies: Centralization and Decentralization from the Fuqaha Point of View

Syed Redzuan Syed Yusuf, Nadhirah Nordin

http://dx.doi.org/10.6007/IJARBSS/v14-i12/23921

Open access

The Fuqaha diverge on the issue of currency issuance and supervision under Shariah law, due to the lack of a dedicated discourse on currency within classical Islamic literature, where the topic is only briefly mentioned in various chapters related to worship (Ibadah) and transactions (Muamalah). This discrepancy raises pivotal questions regarding contemporary Islamic economic policy and jurisprudence, particularly in the context of centralized versus decentralized financial systems. These modern frameworks starkly contrast with the classical Islamic era and present challenges in elaborating Shariah-compliant monetary policies. This study seeks to elucidate the Islamic legal position on currency issuance and supervision, with specific attention to centralization and decentralization, as interpreted by classical and contemporary jurists. Employing a qualitative methodology, data was collected through document analysis and expert interviews, and subsequently examined using content analysis. Findings indicate a consensus on the fundamental role of currency as a medium of exchange, a store of value, and a unit of measurement. However, divergence emerges on the authority over currency issuance. While some jurists advocate for centralized control under state authority, others support a decentralized approach, allowing private entities to partake in currency regulation. The study further proposes Shariah-compliant parameters emphasizing the necessity for regulatory oversight to prevent elements of gharar (uncertainty) and ghish (fraud) in currency management. The conclusion underscores the importance of establishing clear Shariah guidelines to mitigate ambiguity and ensure economic stability and the realization of the Maqasid al-Shariah (objectives of Shariah) in financial governance.

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Yusuf, S. R. S., & Nordin, N. (2024). The Issuance and Supervision of Currencies: Centralization and Decentralization From the Fuqaha Point of View. International Journal of Academic Research in Business and Social Sciences, 14(12), 72–84.