On Nov. 13, the militant, jihadist group ISIS, the Islamic State of Iraq and Syria, announced its plans to mint its own currency. The metal coins, to be dispersed in gold, silver and copper, will be worth their material value in their weight. The design of the coins includes Islamic slogans written across the front and images associated with ISIS’s goals. One example from the back is a map of the world which points to the State’s aim to spread Islam throughout the world.
The dinars — the technical name of the gold coins — will eventually be circulated throughout the entire region controlled by ISIS and be the primary means of trade, replacing the Western money and banking system. That system, the State asserted in a statement, is fueled by “satanic usury,” and for that reason, ISIS wishes to remove itself from the widely accepted, international structure.
ISIS mentioned in the same statement that their attempt to free Muslims from the onus placed upon them by the Western banking system is a part of their endeavor to “revert the center of the region to the type of lifestyle lived during the prophet Mohammed’s reign,” as the Guardian stated.
In order to obtain the financial means to launch a completely new form of currency, ISIS needed to accumulate more than a billion dollars in its reserve, according to a CNN report. The State reaped its current wealth through an extensive oil trade, selling ancient artifacts from the cities it conquers and robbing banks. Now, ISIS is bringing in about one million dollars each day.
Many critics point out that ISIS’s new currency system is doomed to fail. Gold and currency expert Axel Merk told CNN that it will be difficult to get citizens to “accept the monetary system” and to sustain it.
Even more importantly, the thought of upholding a monetary system based solely on the actual metal seems quite implausible. “Eventually, ISIS will run out of gold to finance its activities and will be forced to lower the metal contents in the coins,” Merk said.
According to assistant professor of economics Jeremy Cook, it may take some time before ISIS’s coins fulfill the functions of money. He said in an email, “For this new currency to be successful, the people need to be willing to accept a dinar in exchange for some good or service. Also, it might take some time for people to get a sense of the value of goods in dinars. For example, how much is a ham sandwich worth in dinars?”
While under scrutiny, the State seems to understand something that economists have lamented for decades — the system of banking in the West that rests upon the idea of credit and the non-tangible. This system has led to immeasurable dollars’ worth of debt and general public unrest about the state of their “money,” which many people have never seen or touched.
The popular opinion among economists is that the survival of a banking system independent of the current western one will inevitably deteriorate. Surprisingly, even members of ISIS admitted that they do not believe in its success. One anonymous ISIS member told the Guardian that “if (ISIS wants) people to buy eggs with new coins, then they will. But the real business will be done with real money.”
It is possible that ISIS is declaring its new currency simply for the symbolism innate within currency. Currency, quite literally, represents how much an independent entity is worth, especially when comparing it with other countries’ currency. ISIS may be retreating back to a more primitive state of affairs that is destined for failure, but when those within the system begin to trade, they will know — perhaps unlike United States citizens — that their services are as good as gold.