It was a breaking news with lots of hue & cry when the PAS led Kelantan State Government introduced the Gold Dinar & Silver Dirham recently... Everybody - politicians from opposing sides obviously are at odds & gave their worth of views, and of course statement issued by the Bank Negara...
It was reported that the move by the Kelantan State Government to create a "new currency" is illegal under the relevant Act & could not be accepted as a legal tender. The only legal tender recognised under our monetary system is the "Ringgit Malaysia" i.e. the paper currency.
The Kelantan State Government on the other hand said it is not a currency but would be used as a "barter trade" tool... So there's nothing illegal about it since it is not an alternative to the currently recognised paper currency. Moreover it is based on a voluntary basis on the part of the consumers/those who want to participate in this "new trade"....
I would leave the legalistic of this issue to the financial/legal experts in finance/banking laws...
This post is merely meant to trace the history of the Islamic currency/Islamic Mint i.e. the Gold Dinar & Silver Dirham as there is a saying " Tak kenal maka tak cinta"....
There was a Musnad of Imam Ahmad Ibn Hanbali which goes as follows:
" Abu Bakr Ibn Abi Maryam reported that he heard the Messenger of Allah (pbuh)said: A time is certainly coming over mankind in which there will be nothing (left) which will be of use save a dinar and a dirham."
It was recorded that Caliphate Umar Ibn al Khattab first ascertained the precise weight of dinar vis a vis dirham i.e. "the weight of 10 dirham is equivalent to 7 dinars". Muslims used gold & silver coins by weight which were made by the Persians.
As to the weight, Islamic Dinar is equivalent to 22K gold (4.25 grammes) while Islamic Silver is equivalent to specific weight of pure silver of 3.0 grammes.
It was then continued was during Caliphate Uthman (ra)with Arabic inscription of "In the name of Allah" found in the observe margin.
The Dinar was first introduced in 75 AH (695CE) by Caliph Abd Malik Ibn Marwan when he ordered al Hajjaj to mint the first Dinar. The word "dinar" derived from "denarius", a Roman currency. In 76 AH (696 CE)Caliph Abd Malik ordered the Dirham to be minted in all regions of Darul Islam and stamped with sentence "Allah is unique, Allah is eternal". With this gone were the images of human and/or animals on the coins used then.
The gold & silver coins remained as the official currency of Darul Islam until the fall of the last Caliphate of Ottoman. The coins were used mainly as a savings, to pay zakat & Dowry as well as in buying & selling.
There is currently a move to introduce the Islamic mint amongst the 1.1 billion Muslims in 51 countries and even Malaysia at one point of time through Tun Dr. Mahathir said (when he was still the PM) that Dinar would be introduced in Malaysia by 2003. It was somehow "halted" when he resigned and Tun Abdullah Ahmad Badawi took over... There was not an iota of hue & cry/objection then when Tun Mahathir came up with the idea as opposed to what the Kelantan State Government faced recently .... Is the idea/concept different? I do not think so ....
Those who propagate the Islamic Dinar argued on the following main reasons for the advantages in introducing the Dinar as a currency:
1. Stability - there would be zero inflation. It is said that during the Prophet's time, a chicken would cost 1 Dirham and it remains the same today i.e. 1,400 years later.
2. Reliability - it could not be manipulated/inflated as it could not be printed more as opposed to the paper currency.
Lastly but not least, it is opined that Islamic law does not permit the use of promise of payment as a medium of exchange as in the usage of paper currency ...
Lest I might be wrong I would leave it to the expert to analyse & have an intellectual discourse on this issue ... But my limited expertise & knowledge as a lay man on this issue is the following:
Where is the logic of not using the gold Dinar as a tool of trade when the paper currency itself is being "guaranteed in its value" by the solid & stable gold reserves a country has in her "possession"!!!! ......
Till we meet again ......
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