The Prohibition of Riba al-Fadl

This hadith from Sahih al-Bukhari establishes the fundamental prohibition of riba al-fadl (excess usury) in same-kind exchanges. The Prophet (ﷺ) explicitly forbade trading gold for gold or silver for silver unless it is equal in weight and hand-to-hand. This prevents any unjust enrichment through the exchange of identical commodities where quality differences might be exploited.

The Wisdom Behind the Prohibition

The prohibition serves to eliminate ambiguity and potential injustice in transactions. When exchanging identical commodities, any difference in quantity creates riba. The wisdom lies in preventing disputes and ensuring fairness, as these precious metals function as monetary standards.

Scholars explain that this ruling applies to the six ribawi items mentioned in other narrations: gold, silver, wheat, barley, dates, and salt. When exchanging items of the same kind and category, they must be equal in measure and simultaneous in exchange.

Permissible Cross-Commodity Trading

The Prophet (ﷺ) explicitly allowed trading gold for silver and vice versa without the requirement of equal weight, permitting the parties to agree on any exchange rate. This reflects the understanding that these are different commodities, and their market values naturally fluctuate.

This permission enables legitimate trade and economic activity while maintaining the prohibition against usury. The exchange must still be hand-to-hand (simultaneous) to avoid riba al-nasi'ah (delay usury).

Contemporary Application

In modern finance, this principle governs currency exchange and precious metal trading. Exchanging different currencies is permissible with market rates, while exchanging identical currencies must be at par value. This ruling forms the basis for Islamic banking principles regarding spot transactions and prevents speculative practices that involve usury.