The case against the Islamic gold dinar

Abstract

The claims that the Islamic gold dinar will avoid inflation and other ills of current economic crises are examined by studying how coinage systems actually functioned in history.The article shows that not only these claims are baseless but also that coinage would increase the prevailing interest rate in an economy - hardly an Islamic position. It is argued that a gold or silver based dinar would be harmful for Islamic societies and attempts to introduce them should therefore be prohibited.Islamic gold dinar, interest rate, Gresham's Law, barter, commodity money, money as a medium of exchange, fiat money