Barter as a Means of Payment in a Non-Usurious Economy: A Jurisprudential and Legal Analysis

Abstract

Contemporary monetary systems are structurally grounded in interest-based credit and financial intermediation, a configuration that has generated persistent economic instabilities and normative tensions with the principles of Islamic economics. Within a non-usurious framework, the elimination of interest cannot be achieved solely through contractual reform in banking; it also requires rethinking the instruments of payment and settlement that underpin everyday economic exchange. This article adopts a narrative review approach and a descriptive-analytical method to examine barter as a potential means of payment in a non-usurious economy, integrating jurisprudential reasoning with economic analysis. Conceptually, barter is distinguished from related notions such as commutative exchange, debt set-off, and quasi-monetary instruments, highlighting its non-monetary yet contractual nature. From a jurisprudential perspective, the study analyzes the permissibility of barter within Islamic law, focusing on its relationship with key concepts such as riba, gharar, possession, and contractual conditions, and emphasizing the critical distinction between genuine and simulated barter. Economically, the article explores the functional role of barter under specific conditions including liquidity shortages, financial sanctions, chronic inflation, and currency crises, arguing that barter can reduce dependence on interest-based banking and enhance economic resilience. The findings suggest that barter should not be viewed as a full substitute for money, but rather as a complementary instrument that, when properly designed and institutionally regulated, can contribute to a diversified and normatively coherent architecture of a non-usurious economy.