The militants of the Islamic State, also known as ISIS, have announced plans to create and issue its own currency for the regions under its control. ISIS announced that it would be minting gold, silver and copper coins with standardized weights and values to act as the legal tender of the lands controlled by the group, liberating the areas from the “satanic usury-based global economic system.” In one of the more questionable assertions of the announcement, ISIS claimed that its currency would not be affected by movements in the dollar and other prevailing world currencies.
The violent jihadist group has seized vast swathes of Syria and Iraq, killing those that oppose their absolute rule. The ultimate plan of the group is to create an Islamic caliphate in the Middle East, as the area was more than 1,300 years ago. The militant group already has its own flags, issues license plates and passports, and has formed ministries and a court system. The method of minting the coins and a timeframe for when they would begin to circulate was not disclosed.
Some historians and other experts are predicting that practical problems, including a stigma against widespread usage, would doom the currency. They say that the use of the currency would be extremely limited for use in buying and selling goods and services and that most central banks would not accept it as a legitimate currency. Others believe that ISIS does not have enough wealth to obtain enough gold and silver for the mass circulation of its coins.
However, some see the move by ISIS to be an intriguing one. The Islamic State’s goal to use gold as a currency could be an ideal way for strict Muslims to transact business and amass wealth, as gold is a non-interest-bearing investment and charging interest is forbidden under strict interpretations of Islamic law. Gold also holds its value better in times of uncertainty, making it a more stable currency than paper currency. The circulation of coins made of gold and other precious metals predate the circulation of paper currency by nearly 1,300 years.