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Islamic Gold Dinar Will Minimize Dependency on US Dollar

by Khaled Hanafi, IOL staff, Jan10/03

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The first Islamic gold dinar was issued in 1992

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.

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