It relates intimately to the word for a bankrupt, muflis, which either means someone who only has small change (fulus) and no gold or silver, or in the more extreme case, someone who does not even have small change. However, the former understanding would have to be read by a modern Arab as someone who only has 'money'; i.e. if you only have money, you are bankrupt.

A great deal of modern Muslims' misunderstandings of money as a subject stem from the fact that when Europeans were dealing with Muslims, during the long centuries of confrontation, trade and imperialism, they introduced their own paper money on the false premise that it was simply fulus. The convoluted history of European money and its infestation with usury, and its long transition from being a receipt for gold or silver deposited for safekeeping with a goldsmith to being an entity invented out of nothing by wealthy private bankers who then charge interest for its use, is probably too long a detour for this essay, and is beginning to be sufficiently well known to be dispensed with. Suffice it to say, that modern money encapsulates within itself enough usury to sink an ummah (which it did), and should definitely not be confused with fulus.

We come now to the students of Shaykh Dr. Abdalqadir as-Sufi, whose long and determined propagation of the (by now better understood) critique of modern money has gained them well deserved affirmation and recognition amongst the few, but amongst the many made them somewhat suspect and, in some quarters, deeply unpopular. That was until the ongoing global financial catastrophe of 2008-2010 in the light of which they began to appear somewhat prescient and more widely appreciated. However, it would now appear that they have re-opened the door to suspicion by calling for the issuance of Islamic paper money, referring to it as fulus, which the great majority of Muslims still understand as money. "Subhanallah! Weren't they against paper money, and didn't they publish fatwas against it, declaring it haram?"

Therefore, given the crucial importance of what is at stake, it is imperative at this point that we clarify the matter as best we can.

The Muslims since the time of the Prophet, may Allah bless him and grant him peace, and his Companions, may Allah be pleased with them all, used three things in the main for currency: "the gold dinar, the silver dirham and fulus, these latter originally being small copper coins of no higher denomination than half a silver dirham. This can be seen in any work of fiqh or history, and is documented in the admirably thorough Mawsu'ah Fiqhiyyah - Fiqh Encyclopaedia" published as a massive forty-five volume set from Kuwait.

"The employment by the Prophet, may Allah bless him and grant him peace, and his Companions of Roman dinars and Persian dirhams on which there were images of their kings, and they had no other currency except for fulus."

The values of the gold dinar and silver dirhams depended on their weight and the purity of their precious metals. The value of the fulus, on the contrary, did not depend on the value of the copper, but rather on the number printed on their faces. They were merely tokens for the small transactions for which even small silver coins would be too valuable.

This is a matter that is beyond controversy. The works of fiqh of the madhhabs deal with it in detail, down to whether or not it is assessed for zakat, and whether or not zakat can be paid with it.

When launching the currency, Shaykh Dr. Abdalqadir as-Sufi said, "At a meeting I had with Shaykh Mahmud Effendi of Turkey, the head of the Naqshabandi order, may Allah give him health and a long time with us and protection, Shaykh Mahmud Effendi said, 'This (the dinar and dirham) is the currency of the Muslims, but you must have the fulus, for two reasons: there is no zakat on fulus because it is not a precious metal, and the widow must be able to buy her bread, a loaf of bread, with an untaxed currency that allows her to be halal in all her transactions.'"

So this is a vital part of Muslim commerce, for Muslim culture very naturally centres around the needs of the poor, contrary to capitalism which caters to the priorities of an oligarchical banking plutocracy, with the disingenuous assertion that wealth will 'trickle down' and ultimately reach the poor, which it demonstrably doesn't do. Capitalism obscenely enriches a very few and reduces the global population to penury and debt-slavehood. The fulus represent the currency that is in daily use in countless transactions by all segments of the society for small everyday items, but of course, it represents the dominant currency of the poor, and as the Shari'a would have it, will in most circumstances be exempt from assessment for zakat.

Now, critics of modern money, rail against the retention by private banks, hidden behind names such as The Federal Reserve resonant with the sense of their being national institutions, of the power to invent new credit out of nothing and insist that such a right belongs only to the state. This is an echo of an earlier much more fundamental duty of the sovereign to authorise the minting of currency according to known purities of the precious metals and known weights and dimensions, stamping his name and, sometimes, his image on the coins in verification of that process and in acknowledgement of his responsibility in this regard. This was the case in the east and the west, in Christian lands and in the lands of Islam.

These monetarist reformers, however, being enthralled by the power of credit creation and the consumer society it has spawned, are reluctant to see this power to create money by fiat abolished; they want it retained by the state. They fail to see that the implications of this power are equally devastating no matter whose the hand that wields it. However, they are correct in identifying the ruling authority as responsible for the issuing of currency, but this should be in the sense of the authentication of the currency's actual value, not the licence to create it at will out of thin air.

But what about the fulus? For here we have something of no intrinsic value, but rather something whose value is determined by the numbers minted or printed on it. As we said, its issuance belongs to governance and to no one else. Its value, however, is very limited; it is small change, and thus its effect on the economy ought, in the regular run of things, to be minimal. We note with caution that Muslim rulers at various points did wreak some havoc by an over-abundant supply of fulus.

Some confusion has arisen over the fact of the traditional minting of fulus as copper coins and this recent printing of fulus as paper; ought we not to follow the traditional mode? We were fortunate recently in Norwich to hear a remarkable discourse by Dr Muhammad Ghanem on "The Islamic Concept of Money," which is also the title of his PhD thesis.

Apart from being devastatingly forthright in asserting that modern paper currency is the very essence of usury, he also made very clear that while the usage by the Prophet, may Allah bless him and grant him peace, and his Companions of gold dinars and silver dirhams means that it is inconceivable that any Muslim ruler should ever prevent the usage of gold and silver as currency (even though all so-called 'Islamic' polities do in fact outlaw their use), it does not mean that we are obliged only to use them and no other currency.

The same principle applies to fulus; the fact of their historical use as copper does not preclude their being printed on paper. This is a specific application of a general principle; the fact that something was not done in the time of the salaf does not mean that it is not allowed to do it, nor does it mean that when it was done in their time in a specific way, that other ways of doing things are thus prohibited. Only a specific prohibition means that something is prohibited.

So, there is no reason for fulus not to be printed on paper, and very good reasons today why it should be, given the general acceptance of paper money by the global population. Interestingly, whereas with the dominant usury-based finance, minted coins are small change and paper is reserved for the larger denominations, with our Islamic currency the process is reversed and the gold dinar and silver dirham represent the larger denominations and paper currency represents the small change. This is really as it should be, because the global usury-driven finance system is based on a currency that is in every sense a walking debt, moreover a debt that is growing exponentially in a completely unstoppable way.

Now, the proposition that someone is muflis or bankrupt if they only have 'money' and have no gold or silver has become self-evident to a much greater number of people than could have been hoped for even a decade ago. It is time for the Muslims to restore a genuine currency with its gold dinar and silver dirham, which have proven to be non-inflationary over millennia, and the vital fulus for the small change that is used for the huge majority of daily transactions.

This article is taken from http://www.muslimsofnorwich.org.uk/?p=811