ISIS TO ISSUE ITS OWN COINAGE?

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V17 2014 INDEX E-SYLUM ARCHIVE

The E-Sylum: Volume 17, Number 47, November 16, 2014, Article 25

The terror group known as ISIS is said to be planning to reintroduce silver and gold dinar coinage in areas under its control. Here's an excerpt from a November 10, 2014 Daily Mail article. -Editor

ISIS wants to introduce its own currency and plans to bring back solid gold and silver dinar coins, it has emerged.

The Middle East terror group apparently wants to introduce its own Islamic currency as part of its attempts to solidify its makeshift caliphate.

Militants are said to want to bring back the original dinar, which is an ancient currency from early Islam, and religious figures in Mosul and Iraq’s Nineveh province have apparently announced its return in mosques.

The currency known as the dinar, which once consisted purely of gold and silver coins, is today used by a variety of countries, but the coins are created from different materials to the originals.

However, the jihadi group is understood to be planning to return to the original gold and silver coins, which were first introduced during the Caliphate of Uthman in 634 CE.

The original Islamic dinar was a gold coin which was the weight of gold equivalent to 4.3 grams. Its silver counterpart, known as the Islamic dirham, was a silver coin equal in weight to 3 grams of silver.

Both were round in shape and one side of the coin was typically stamped with an Islamic message, while the other side featured the date of minting and the country’s ruler.

While ISIS has yet to confirm the introduction of its currency, social media is awash with claims that leading religious figures announced the plans during recent prayers in Mosul and Nineveh province.

It is believed the terror outfit wants to use the independent currency in areas it controls as part of its war on the West.

Ben Keele forwarded a CNN article. -Editor

This is really interesting. As a collector, I wonder about the ethics of purchasing or owning coins minted by an oppressive organization and largely funded by ransoms and extortion. On the other hand, we collect coins from plenty of oppressive and violent rulers.

ISIS is planning to mint its own currency in gold, silver and copper, the group said Thursday.

Its aim is to stay away from the "tyrant's financial system," ISIS said in a statement. It said it would issue another statement to explain the new currency's exchange rate, and where it can be found.

The currency will include seven coins: two gold, three silver and two copper. The move is "purely dedicated to God" and will remove Muslims from the "global economic system that is based on satanic usury," ISIS said.

The terror group, which calls itself the Islamic State, has seized large swaths of territory in Iraq and Syria.

To read the complete article (and watch a video), see:
ISIS announces new currency (www.cnn.com/2014/11/13/world/meast/isis-currency/index.html?hpt=hp_c2)

Arthur Shippee forwarded this article from Haaretz, which even includes images of coin designs. -Editor

A website affiliated with the militant group said late on Thursday that its leader, Abu Bakr Baghdadi, has instructed his followers to start minting the coins to "change the tyrannical monetary system" modelled on Western economies that "enslaved Muslims."

The posting says the order was approved by the group's Shura Council, an advisory board.

Sketches of the coins appear in the statement released by Islamic State's Beit al Mal, or treasury, that was posted on websites used by jihadist movements. Depicted on the coins are symbols of Islam. On one of the silver coins is a picture of the Al-Aqsa mosque, which is situated on Temple Mount/Haram al-Sharif in Jerusalem.

Issuing the coins is part of Islamic State's efforts to achieve statehood, Mohsin Khan, a senior fellow at the Atlantic Council’s Rafik Hariri Center for the Middle East, told Bloomberg. “One of the attributes of a state is that it issues its own currency,” he reportedly said by phone from Washington. “That defines you as a state at least in the eyes of your own people and perhaps in the eyes of others.”

“The important thing is: where are they going to get the gold and copper [used to produce the coins]?" Steven H. Hanke, professor of applied economics at Johns Hopkins University, told the Financial Times. "ISIS will have to confiscate more property through theft and the spoils of war."

Dick Hanscom forwarded this update from the Telegraph. Thanks. -Editor

On one of the gold coins with be a symbol of seven wheat stalks and on the other a world map.

The silver coin had three different denominations: one symbolised with a spear and shield, another with a white minaret of Damascus and a third with the al-Aqsa mosque - one of the holiest sites in Islam. For the copper currency, one coin has a crescent while another more valuable coin has a palm tree.

To read the complete article, see:
Islamic State announces its own currency (www.telegraph.co.uk/news/worldnews/islamic-state/11230324/Islamic-State-announces-its-own-currency.html)

Is this for real? Who exactly designed these coins? Who will be producing them? A contractor? Per Ben Keele's question, would they be complicit in ISIS' crimes? Will they find themselves boycotted by the rest of the world? It will be interesting to see how this develops. Pablo Hoffman forwarded a New York Times article that questions the viability of the entire concept. Thanks. -Editor

Many money historians and other experts said no, describing the announcement as a propaganda exercise, meant largely to reinforce the Islamic State’s self-anointed legitimacy.

They said practical problems could doom the currency, notably its stigma elsewhere, severely limiting its use for money’s basic purposes of buying and selling other goods and services.

“What central bank is going to accept an ISIS coin?” said David L. Phillips, a former adviser at the United Nations and the State Department, now at Columbia University’s Institute for the Study of Human Rights.

“It’s like blood diamonds,” he said. “No credible financial institution is going to take this.”

“Of course this is nonsensical,” said Steve H. Hanke, a currency expert at Johns Hopkins University. The purchasing power of gold, he said, “is determined in the world market, and has nothing to do with ISIL.”

Some economists said there could be something to the Islamic State’s aspiration to use gold for money, seeing it as a potential new venue for smuggling and thievery.

They noted that since charging interest is forbidden under strict interpretations of Islamic law, gold as a non-interest-bearing investment could be an ideal way for more strict Muslims to transact business and amass wealth.

Charles Morgan and Hubert Walker at CoinWeek agree that the concept is nonsensical. In a lengthy article posted earlier today, they take apart the story point by point, listing a series of reasons why it makes no sense. Be sure to read the complete version online. -Editor

The whole discussion is a bit daft when you consider that ISIS, despite its aspirations and proclamations, is not now and will likely never be a state and endures daily bombing campaigns and armed pushback from all directions.

To further illustrate how much of a non-story it is, we present five reasons why ISIS is not manufacturing its own gold and silver coinage, nevermind whether such a move would topple the economic superpowers of the West or not.

5) The “story” is little more than ISIS trolling the West through social media

The most effective campaigns use the media to communicate their message to the general public.

What ISIS has done by posting a few tweets about their desire to strike gold and silver coins is a good example of such media manipulation. Let’s be clear, there can be no vetting of this story. ISIS is not a country. It has no embassies or consulates, no treasury department, no sources of bullion nor production facilities. They have sent no one forward to officially announce the claim, and have fielded no reporter’s questions.

Yet it’s somehow “newsworthy”, spreading across the airwaves as fast as any rumor about Ebola.

Maybe ISIS will prove us wrong and establish its own mint. Maybe it will source gold and silver ingots by the ton. Maybe it will hire a staff of skilled engravers, die cutters, and press operators and find a way to distribute it all. Maybe some kind of money will actually circulate. Saying it’s impossible isn’t the point.

But if that day comes, then have at it, media. You’ll have a really interesting coin story for a slow news day.