Purpose – The article examines Sheikh Ahmad Khatib Al-Minangkabauwi’s initial concept of paper money,
which in the early 20th century wrote Risala Raf’u Al-Iltibas.
Design/methodology/approach – This paper uses a qualitative approach based on the critical extraction
analysis that can reveal a set of concepts related to the thoughts of Sheikh Ahmad Khatib Al-Minangkabauwi
on paper money.
Findings – Through an attentive reading of Sheikh Ahmad Khatib Al-Minangkabawi, the authors can
formulate several significant results: First, Ahmad Khatib Al-Minangkabawi applies two methods in studying
critically on paper money, namely, the comparative law method and qiyas. Second, Ahmad Khatib believes that
paper money has similarities with dinars and dirhams, namely its nominal value function. It is just that the
existence of these values is different. Briefly, there are set law consequences for those who used paper money in
economic activities, i.e. payment of zak�at on paper money applies when used as business capital.
Research limitations/implications – Sheikh Ahmad Khatib Al-Minangkabawi’s work related to paper
money is written heavily from the perspective of fiqh. Briefly, it is challenging to describe legal reasoning from
work. As a result, articles are also thicker with fiqh analysis.
Practical implications – Sheikh Ahmad Khatib Al-Minangkabawi’s view regarding paper money becomes
the foundation for the theory of the value of money in Islam. However, it is rarely disclosed. In this regard, this
paper can serve as the foundation of the value for money offered by scholars from Indonesia in the early 20th
century.
Social implications – Money is not a commodity. Still, it must be positioned as capital to be productive. It
finally becomes why trade is compelling and becomes the most practical reason for paying out zak�at.
Originality/value – It is not easy finding out articles that attempt to reveal the concept of classical ulemas or
clerics from Indonesia relating to paper money. This article manages to identify that, and at the same time,
becomes a novelty.
Keywords Paper money, Comparative law, Qiy�as, Money philosophy, Fiat money, Nominal value