How to buy and sell rare currencies without approaching riba?

Question

Among collectors, there are people who collect coins and banknotes which are considered rare or unusual. Often these would be older currencies which are no longer produced (although they may still be considered legal tender), but this could also include currencies which are currently in circulation which are considered special in some way (e.g., coins with an unusual printing error, or banknotes with interesting serial numbers).

Such currencies are often bought and sold at values significantly above their face value.

There are a number of reports that the prophet forbade trading goods for the same type of goods in anything except equal amounts; the classic example involves the trading of high quality dates for lower quality dates. Rather than trading such in unequal amounts, the sunnah in such cases is to sell the lower quality dates for money, and then purchase the high quality dates with said money.

The concern in the rare currencies situation above is that the "product" to be traded is in fact legal tender; since it is money itself, there is no real way to sell it for money except as like-for-like. According to the dates-for-dates principle, a penny that is, legally, only worth 1 cent but which a collector would be wiling to pay hundreds of dollars for could only, in fact, be "sold" for 1 cent.

Short of buying some sort of "dummy" good for one cent, and then selling the same good back to the collector for the profit (which just seems dodgy and make-work to me), is there anything in the hadith literature which could apply to this sort of situation?

Answer 1

Good question!

I think with rare currencies that are no longer traded for their face value, but rather for their collectible value, the rules concerning riba and currency don't apply anymore. This is from a discussion on islamtoday:

However, rare notes and coins have – according to the customs (`urf) of the market wherein they are sought – have ceased being traded as a medium of exchange and have become objects of value in their own right.

Therefore, it is permissible to purchase these objects with currency. This is the case even if the rare coin or bill is of a type that is still recognized by statute as being legal tender. One can purchase a rare coin or bill with modern currency of nominally the same type.