Iqalah is a mutually agreed undoing of an existing sale. The original price remains the basis, and a condition substituting a lesser or greater amount is not valid within iqalah.
On Abu Hanifah’s approach it is rescission between the parties and a new sale as regards qualifying third-party rights, classically exemplified by pre-emption.
The exact banknotes need not survive, but the original goods matter: full loss blocks ordinary iqalah, while the surviving portion can be covered when loss is partial.