What is the ruling on trading in paper currency?

The questioner : Yes, trading in currency, O our Shaykh. For example, we have the dollar for the pound, or the dollar for... is it permissible?

The Shaykh : This is a problem of the present age, and I do not see it as permissible. The reason, in my opinion, is clear, were it not for the problems surrounding Muslims, meaning economic problems. This paper currency has no intrinsic value, as is known to all people. What is required is that every one of these paper currencies, if it were truly paper, would have no value except a nominal value, which is the amount of gold saved for each dinar or pound, for example, according to each country. But these currencies, due to the dominance of major powers over economic spheres, have become like gambling paper. If the strong state wishes to lower the value of its currency, it lowers it, and if it wishes to raise it, it raises it. Thus, the matter is unregulated. This is unlike the case where gold and silver are the currency circulating among people, for in that case, this lowering and raising is not within the power of governments, because they would be a global currency, gold and silver, unlike paper currency, which is specific to each country. Therefore, you hear, as we hear, that such-and-such a state has decided to lower its currency or decided to raise its currency, because it is a currency specific to it. Here, economic instability enters, not only in that nation but also in the other nations that deal with it. You see a man who, between one evening and the next morning, is rich, and then he becomes poor, and vice versa, due to this manipulation of paper currency. Therefore, I have concluded from this observation that a Muslim should not take the profession of currency exchange, especially this paper currency, as his profession. Rather, if a Muslim has a currency or receives a currency that he cannot refuse because it is part of his wealth, he exchanges it for the currency by which he sustains himself or lives in his country, from the standpoint of dire necessity only, and not from the standpoint of profit and trade. This is what I have, and Allah knows best. The matter is delicate and dangerous. In my belief, it is obligatory that a group of scholars who address the issues befalling the Muslim community in light of the Book and the Sunnah only, and not in light of the temporary benefit that some jurists of this time consider a legal proof, should gather. This is what I have, and Allah knows best.