Fatwa ID: 01499
Answered by Mufti Mohammed Tosir Miah
Selling gold in exchange for money
In the name of Allah, the most Beneficent, the most Merciful.
Mufti Taqi Usmani (DB) has said that paper currency is a medium of transaction in itself hence it is to be considered to be in place of gold or silver. The notes cannot be converted into gold or silver and they are accepted as money throughout the world. Paper currencies fall into the category of Fulus. (Al Qadhaayah Al Fiqhiyyah Al Muassirah – Mufti Taqi Usmani p.147)
With regards to your question, in the Hanafi Fiqh, the cause for riba is the trading of any good measured by weight or volume in exchange for goods of the same genus. (Fathul Qadir p.183 v.5 & Badaaius Sanaai p.247 v.5)
As paper currencies are not from the same genus of gold or silver but are measured by the same weight, it will be permissible to buy and sell with excess on one side however, it will have to be done in the same sitting.
Only Allah Knows Best
Mohammed Tosir Miah
Darul Ifta Birmingham.