Islamic Gold Dinar Will Minimize Dependency on U.S. Dollar

Islamic Gold Dinar Will Minimize Dependency on U.S. Dollar


The first Islamic gold dinar was issued in 1992


By Khaled Hanafi, IOL staff

CAIRO, January 8 (IslamOnline) – Malaysia will start using the Islamic gold dinar starting mid 2003 in its foreign trade section with some countries replacing the U.S. dollar in a first step move toward unifying the currency used in commercial dealings between Islamic countries.

The success of this idea, according to several western newspapers, may lead to minimizing the U.S. dollar hegemony as an intermediate tool in commercial dealings in the world.

The idea was adopted by Malaysian Prime Minister Mahathir Mohamad who conducted bilateral talks during the year 2002 with several Islamic countries, including Bahrain, Libya, Morocco and Iran, to convince them of using the Islamic dinar as a way of payment in their commercial dealings with Malaysia.

This move is considered from one side a way to recall a currency related to the history of Muslims and their monetary heritage since the time of Prophet Muhammad (peace be upon him), and from the other side, the ability to find the Islamic alternative to the dollar at a time the calls to boycott all what is labeled as American starting from goods to currency, are intensified.

The idea of the Islamic gold dinar belongs to Professor Omar Ibrahim Fadillo, founder of the Morabeteen International Organization founded in 1983 in South Africa where it is widely known as well as in Europe.

The organization believes that the unity of the Islamic world can not be achieved except through the unification on the economic level. It also calls for the establishment of a united Islamic market using one currency which is the gold Islamic dinar used by the Morabeteen members, hoping it will replace the U.S. dollar.

“The idea of the Islamic gold dinar aims at minimizing the hegemony of the U.S. dollar and to use the gold once again as an international currency because the value of the paper currencies is in continuous fluctuation unlike the stable gold currency which preserve its value through the value of the metal itself.

The system is built on the idea that the Islamic governments keep the gold in a central bank and use it in settling their commercial dealings instead of depending on foreign fund markets and foreign financial corporations.

Dinar Online

The first Islamic gold dinar, equivalent to 4.25 grams of 22-karat gold, was issued in 1992 on a very limited scale between the member of the Morabeteen.

In 1997, the idea developed to be implemented into an exchange framework through launching what was called the electronic dinar, a system based on using the gold as fund through transactions made on the internet.

According to the e-dinar limited company based in the Malaysian island of Lapoine, the electronic transactions using the gold Islamic dinar currently reached what is equivalent to 4 tons of gold and that the users are increasing with 10% monthly.

The number of users through the electronic dinar website www.e-dinar.com, launched in 1999 after 7 years of issuing the Islamic gold dinar, reached 600,000 and that number is increasing, the company announced.

Several countries around the world are currently dealing directly with 100,000 Islamic gold dinars and 250,000 silver dirhams issued by the company, hoping that one day it will replace the U.S. dollar in the dealings of the 1.3 billion citizens of the Islamic countries.

Benefits of Dinar for Islamic countries

The success of the gold dinar as a united Islamic currency will depend on the level of demand of the countries that want to deal with it as the primary currency in the international commercial dealings.

Islamic countries will benefit if they implement this new currency in many ways, the most important of which is that these countries will not need reserve of foreign currencies to finish commercial trading, Dr. Mohamed Sherif Beshir said.

“Consequently, the gold dinar will be the ideal currency to facilitate and increase international trade and minimizing speculation in paper currency that lead to the Asian currency crisis in 1997,” he said.

The existence of a fund unity between the countries of the Muslim world will increase the amount of trade between them and will help in increasing the economic development if the conditions for the success of the gold dinar were provided, he added.