Assalaamu alaykum. I have understood from a previous fatwa on the website that buying gold or silver coins has to be done hand to hand, but I need further clarification on the alternative of having a safe with the seller if the transaction is done online. In my country, there are no coin shops, and buying and selling coins is done online. I am really interested in investing in gold and silver since they retain their intrinsic value whereas fiat currencies lose their value over time, as can be seen with the currency wars taking place at the moment. It is my firm conviction that the gold and silver as mentioned in the Quran is real money and that the currencies we are using are merely based on faith and confidence and can crash at any given time. It is, however, very difficult to buy gold and silver in countries such as the one I live in as transactions are mainly done online. Will the sale be correct when the seller immediately places the coins in a rented safe by the buyer for the duration of the transaction when the seller is alerted via mobile that the payment has cleared in his bank account? The seller will then ship the coins to the buyer in less than 24 hours. My questions, thus, are the following: does a temporary rented safe suffice for the transaction, or should it be a permanent safe for long-term storage (owned/rented) by the seller if the coins can be shipped after, say, 6-8 hours to the buyer? May Allaah reward you.
All perfect praise be to Allaah, The Lord of the worlds. I testify that there is none worthy of worship except Allaah and that Muhammad is His slave and Messenger.
We have already highlighted the terms and conditions for buying gold and silver via the internet or phone in many fataawa, and we stated the following:
Selling currencies and like commodities that are subject to the condition of hand to hand exchange on the internet is permissible if there is a virtual exchange. Just as the hand to hand exchange can be physical [i.e. cash in return for the product], it can also be virtual, and it is a valid transaction. If the seller isolates the gold in a safe reserved for the buyer, then this may be considered as a virtual hand to hand exchange, so it is permissible to purchase it based on this.
The Islamic Fiqh Council magazine, issue no. 6/1/453, reads:
“The method of exchanging goods hand to hand varies according to the state of those goods and the difference of the customary practice in regard to what is considered as an exchange. Just as the exchange occurs physically hand to hand or by shipping or transfer to the possession of the buyer or his representative, it also occurs virtually by removing one’s hands off the goods and enabling the buyer to dispose of them as he wishes even if there is no physical exchange hand to hand, including:
- Fungibles if this is something common in customary practice; this is considered as a virtual exchange.
- The bank or its agent receiving the shipping documents when buying the goods from a foreign market and also receiving the storage documents that give a description of the goods stored in warehouses that are run in suitable and trustworthy manners.
- Isolating (setting aside) the goods purchased by the bank in the warehouses of the seller in a distinct manner is considered a valid exchange if it is coupled with one of the following:
(a) If isolating (setting aside) the goods takes place in the presence of a representative from the bank
(B) If the bank receives documents that prove its ownership of the isolated goods
(C) If the goods are numbered and the numbers of the isolated goods are registered in the name of the bank.”
The resolution of the Islamic Fiqh Academy, in its sixth conference in Jeddah, Saudi Arabia, from 17-23 Sha'aban 1410 corresponding to 14-20 March 1990, reads:
“Among the forms of virtual hand to hand exchange: If a sum of money is directly deposited into the customer's account or by bank draft. The delay of bank notice is forgiven in regard to the cases when the beneficiary can actually receive the currency within the periods that are known in the financial markets, but it is not permissible for the beneficiary to dispose of the currency as he wishes during this grace period until after he receives a bank notice of the possibility of actual receipt (of the currency).”
As for your statement, “The coins can be shipped after, say, 6-8 hours to the buyer” (i.e. after the transaction is concluded); then if what you mean is that the contract is concluded on the basis that one of the parties will ship the goods to the second party, then this is not valid as there is no hand to hand exchange, neither physical nor virtual. For more benefit, please refer to fatwa 235801. However, if what you mean is that the goods are deposited in a safe and the owner of the safe authorizes the people in charge of this safe or others to ship his goods to him, then there is nothing wrong with this and it does not have any relation with exchange, as the virtual exchange has already taken place by depositing the goods in the buyer's safe.
Allaah knows best.
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