Today's Rates: Dinar $210 - Dirham $3.50 (price ref)
Documentary Video: Gold Dinar of Madina - Overview of the Dinar MovementGold Dinar of Madina is a documentary video on the Islamic Gold Dinar, produced by eGold Pakistan. It explains the religious and economic case for adopting the Gold Dinar, and traces the history of the Gold Dinar from the time of the Prophet (sm) right upto its abolition and replacement with fiat paper currencies. Finally, it follows the development of the modern dinar movement, which seeks to revive the gold dinar and is currently active in multiple countries around the world.
Original transcript of this documentary is also provided.
Some Interesting facts and corrections have been pointed out by viewers which have been compiled below.
Transcript: Gold Dinar of Madina
It sounds hard to believe … that this tiny piece of metal … holds the key to the economic well being and financial freedom of millions and millions of Muslims around the world…
But what is even harder to believe… is the futile hope, and millions of dollars, and the endless amount of valuable time of our scholars that was put in perfecting the oxymoronic practice of Islamic banking… only to see it crumble at both the ideological and practical levels…
[Imran Hosein video clip]
One only has to understand the very basic teachings o f the Quran and the workings of modern finance, to realize that Riba is not just a procedural feature of the bank, but a fundamental constituent of its underlying monetary edifice: The fiat money currency. This is the chief reason why Islamic Banking has failed; because scholars adept at religious rulings were unaware of the complete picture of how modern banking works, especially, its most critical piece: the monetary, or currency connection. The modern Islamic Bank remains irrevocably unIslamic because it operates on the same prohibited practices of Riba, Gharar, sale of debt and fractional reserve, as well as such dubious distortions of Islamic contracts like cost plus financing.
Riba from our society will never be eliminated by Islamic banking, but only by our rejection of the usurious paper currency, and returning to Rasool Allah’s Sunnah of commodity money… the Sunnah of the currency of Madinah…
This is the story of that small piece of metal… that passed through the blessed hands of the Holy Prophet… that is now successfully winning us the war against Riba… and winning us back our right and freedom to choose how we conduct our business, after centuries of monetary enslavement and deception…. This is the story of the Gold Dinar…
At the surface, the gold dinar is just that, a gold coin… nothing more and nothing less. In this sense too, however, it’s significant as being the newest and distinctly middle-eastern addition to the global lineup of bullion coins. We already had the Gold Eagle and the Buffalo from the United States… the Krugerrand from South Africa… the Maple Leaf from Canada… the Philarmonic from Austria, the Gold Sovereign from Britain, and the Gold Panda from the People’s Republic of China. To this mix, come the newest entrants to the bullion coins market, the Gold Dinar and the Silver Dirham series, unique in being produced under the same standards in multiple countries, including the Arab Emirates, Indonesia, South Africa, and very recently, through private mints in the United States…. Thus, from its very birth, the Gold Dinar transcended national boundaries… and symbolized the underlying unity of the Islamic Ummah.
Apart from its novelty as the first supra-national standard of bullion coins, the symbolic significance of the Gold Dinar derives from another source very close to the hearts of the Muslim world: The Holy Quran. The Dinar and the Dirham are the only two currencies mentioned directly in the holy book, in chapter Aaale Imraan verse 75 and chapter Yousaf verse 20. A mention itself does not imply any juristic endorsement as such but definitely establishes a very strong emotional bond between it and the followers of Islam: A bond greatly enhanced by the fact that it was the same dinar, and the dirham, which has passed through the blessed hands of the Holy Prophet Muhammad, peace be upon him, and his companions. It is this dinar, which he had earned, spent and traded. It is this dinar, which is his Sunnah to use as money.
The name Dinar was originally taken by the Arabs from the Roman Dinarius. Similarly, the silver Dirham came to the Arab world from the Persians, where its usage had been derived from the earlier Greek coin, Drachma.
These coins were used in Arabia in 610 A.D., when Muhammad bin Abdullah, received his first revelation, and thus, set in motion a chain of events culminating in the creation of Islam’s first model welfare state in the City of Medinah. It was this city, which, for the first time in world history, demonstrated not only the viability, but the resounding success and practicality of a real-world economic system that operated completely on Riba-Free Interest-free basis, without any major tax except the Zakaat, employing Qiraad and Mushaarika contracts, and most importantly, using open currencies that settled with near universal consensus to Gold Dinar and Silver Dirhams, along with regional staples like Dates and wheat. In addition, this model ensured open access for everyone to the market place, and to all trading and distribution channels, without discrimination, or undue regulatory hindrances. This small city became the nucleus of an economic marvel of its time that would lead the Arab civilization to become a hub of global economic activity. And the success of this society depended on a single factor, the same factor which is always the only necessary ingredient to real economic progress: increased production and manufacturing, increased agricultural output, and increased trade – all of which became possible because the non-productive avenues of capital appreciation through usury and the usurious system of financial derivatives, were shut down, causing capital flow into real productive uses.
This activity in the means of production is how countries and economies are built, and in lip service at least, everyone seems to agree…. This is how, we all agree, that economies are built.
[Obama speech clip]
The real economy of America, as the President says, was built with toil and labor of real people, and not the phony economy projected on paper and built with the printing presses of the central banks. But it’s always the lure of usurious fiat money, the number play of Riba and Gharar based derivative instruments that cause imbalances which ultimately bring these economies down. Like one that we just witnessed in the United States.
[Ron Paul and peter Schiff clip]
The world is learning this lesson the hard way that the only true form of economic progress is through the real economy, and not a paper economy. A lesson that came to us 1400 years ago in one simple verse brought to us by Muhammad: God has permitted trade, and forbidden usury.
In as much as the Gold Dinars and Dirhams constituted the monetary foundations of Medinah’s economy, and since it is being proposed today as the only viable alternative to Riba, we can safely say that our story of the Gold Dinar starts in Medinah, in the year 632 A.D., when one of the last verses of the Quran was revealed, conclusively prohibiting Riba2, like a jewel in the crown of the most brilliant economic orders ever conceived.
Muslim jurists claim that Islamic prohibition of usury is merely a continuation, or refinement, of similar disdain towards the practice in the earlier Judeo Christian traditions. In fact, the Arabic word Riba used in the Quran is similar to its Hebrew counterpart Ribit, used in the Old Testament.
For example, the biblical teachings regarding money lending in a passage in Exodus, chapter 22, verse 24, go as follows.
When you lend money to any of my people, to the poor among you, you shall not be to him as a creditor, nor shall you impose upon him any interest.
In the catholic tradition also, St. Thomas Aquinas writes in his Summa Theologica,
To take usury for money lent is unjust in itself, because this is to sell what does not exist, and this evidently leads to inequality which is contrary to justice.
And Canon 13 of the Second Lateran Council in 1139 A.D. goes as far as to say
… and we severe them [usurers] from every comfort of the church… let them be held infamous throughout their whole lives, and unless they repent, be deprived of a Christian burial.
The Quran however, has been the most explicit, and forceful in its prohibition of Riba, declaring “war” against those who persist in taking it, and defining usurers as those who have been “driven to insanity by the touch of satan”.
Such a strong stance against usury directly in the Quran and oral traditions of the Prophet is even today allowing Islam to withstand the onslaught of money lenders, who wish to replicate with Islam the success they have had with the Christian church, which gradually succumbed to their demands by accepting the dubious differentiation between usury and interest.
Coming back to Medina, we see that there existed the most “open” market of all times, allowing the people to freely choose whatever commodity they wished to adopt as a medium of exchange, without the shackles of any legal tender laws. The people, by their free will, galvanized towards a few stable commodities and precious metals, with dates, gold, and silver leading the way. In the long run, the Gold Dinar and Silver Dirham were chosen by the market as the de facto currencies of this society.
The Holy Prophet, peace be upon him, himself continued to use the Dinars in their contemporary form, but as the prestige and economic influence of Medina increased, Caliph Umar Farooq, became the first Muslim Ruler to Islamize the Gold Dinar. He had the words “Bismillah” inscribed on them, and regularized the weights and measures of these coins, setting a standard which was historically followed every since. Today, 1400 years on, it is this standard which is inspiring the modern revival of the Gold Dinar and Silver Dirhams. Thus, the Gold Dinar is to be the equivalent of 4.25 grams of 22 karat gold, and the Silver Dirham, to be 2.975 grams of .999 fine silver. The Dirham is often being approximated at 3 grams by mints to compensate for wear and tear and to ensure that at least the standard weight of silver is always present.
For the next 61 years, these coins continued to be used with Bismillah inscribed on them.
This changed in the year 695 A.D. when Caliph Abdul Malik bin Marwan commissioned a project to fully revamp the coins to a patently Islamic design, and also issued the first Silver Dirhams. From then on, the Sunnah money of the Gold Dinar and Silver Dirhams became a regular fixture of the Islamic economy, changing their designs as rulers came and new empires appeared, but always maintaining their essential characteristics.
[Historical coins being shown in the background]
This is one of the oldest gold dinars preserved, of the Ummayya caliph Al-Walid of around 88 Al-Hijra.
The gold dinar of the Abbasid caliph Al-Muqtadir. 318 Al-hijra.
Dinar of the Fatimid Caliph Al-Hakim, 399 Al hijra.
Another Fatimid coin of Al-Amir, 500 Al hijra.
And of course, the gold dinar passed through the hands of the great muslim general and Sultan … the epitome of chivalry and honor… the celebrated Sultan Al-Malik Al-Nasr Salahuddin Yousuf bin Ayyub… also known as Saladin. The coin under his reign in 581 Al hijra…
And the gold dinar is also intertwined with the history of the great ottoman empire… the sublime osmaanli devleti…. The gold coins of Ottoman sultan Suleiman the Magnificient circa 926 Al-Hijra …
And the Ottoman Sultan Mahmud at 1143 al hijra…
The tradition in the Muslim World has always been for the coins to be produced by a Mint usually operated on Waqf basis, an Islamic version of the non-profit Charity. All these coins were mandated to be exchangeable one to one with those of any other mint, and their weights and quality were overseen by the Qadi, or the Amir, possessing executive authority to ensure compliance to standards.
This first phase of the Shariah currency of Gold Dinar coincided in its lifeline with the Islamic Caliphate, both institutions constituting the cornerstones of the Islamic economic and political orders respectively. When the Ottoman caliphate was disbanded in 1922, it officially ended the existence of the Gold Dinar as a medium of exchange and currency, to be replaced by the usurious fiat currencies of the western banking and monetary system.
In spite of being in the weaker position of a subdued nation, Muslim scholars immediately raised red flags over the introduction of paper currencies instead of gold and silver, and the jurist Abdullah ibn Abdurrahman al Bassam summarized four different positions that the scholars of the day adopted.
1) Some claimed it was absolutely unlawful to deal with paper money. This, he writes, was the strongest view at the time.
2) Some said we should deal with it as we deal in gold and silver, because paper money can be replaced with gold on demand. Even if a legitimate position at the time, this view is no longer possible because redemption of specie has long since been discontinued in today’s paper money.
3) Some argued that we should deal with it as we deal in commodities, but this position is also not applicable today because of the legal tender laws.
4) Some jurists said that we should deal with it as we deal in fulus i.e. discounted from the Shariah definition of “Maal”. It is interesting to note that it is the lingering effect of this position that many people in the Indian subcontinent and abroad shy away from buying gold because “there is zakat to be paid in gold” but not on paper. Treatment as fulus is also not possible anymore because of legal tender laws requiring them to be treated as “wealth”, which fulus traditionally was not.
It is abundantly clear that with one position totally rejecting paper money, and three others accepting them on conditions none of which are true anymore, fiat money had practically been rejected whole sale by early Shariah scholars who were confronted with the problem.
By the time when most of the Muslim world regained independence around mid-twentieth century, the politics of colonialism and incapacity of enslavement had so firmly embedded the fiat currency infrastructure in our economies, that it was impossible to immediately shed it off en masse. Each Muslim country now featured a central bank, which created fiat paper currencies through a set of patently usurious transactions between the government treasury and central banks, the simplest of which is the discounted sale of debt – which even a freshman in Islamic finance knows to have been prohibited by such eminent scholars like Justice Taqi Usmani of Pakistan.
As Muslim scholars set out to develop alternatives to the western banking system, the task became particularly formidable for lack of any precedence of this kind available from the earlier teachings: Banking was a totally new concept for many scholars. The Ulema who understood Shariah, did not understand banking, and Muslim financial experts who understood banking, were clueless about the Shariah. The resulting reaction was thus the most natural one to be expected in this case: an impulsive attempt to cosmetically “Islamize” banking, without realizing the underlying currency connection. Modern monetary structure is based on usury and the dictatorial legal tender laws, both prohibited in Islam. Islamic banking is thus as oxymoronic of a term as an Islamic Terrorist: there being no possibility of either of them being “Islamic”, unless the bank completely over hauls its operations to drop usury from all aspects, including the currency it deals with.
As the early Islamic economists and scholars were busy solving the Islamic Banking conundrum, a young Scotsman named Ian Dallas was travelling to Morocco, where he converted to Islam under a new Muslim name: Abdulqadir As-sufi. He was destined to play a pivotal role in debunking the fallacy of Islamic banking, and calling for a return to the true Islamic economic order based on Muaamilaat, the conduct of business affairs, as exemplified by the companions of the Holy Prophet in Medina, starting of course with the monetary base of the Gold Dinar.
“Islam is not and can never be, by definition, in crisis or need of revisionist change”, begins his seminal piece of writing “Root Islamic Education”. This book, along with another published in 1989 from Norwich, United Kingdom, “Usury, the root cause of injustices of our time”, gave the world a solid case and Islamic basis for a return to the Gold Dinar, arguing that without adoption of Sunnah currency, usury is impossible to eliminate from our economy if fiat currencies are allowed to persist.
His movement, called the Murabitun, quickly became popular and attracted many people from around the globe, one of whom, a Spanish convert to Islam, Umar Ibrahim Vadillo, was to go on to become the leading proponent and architect of the global Gold Dinar Movement as we know it today.
[Umar Ibrahim Vadillo clip]
In 1992, the Murabitun of Shaykh Abdulqadir As-Sufi achieved the singular distinction of commencing the second phase and revival of the Sunnah currency of Gold Dinar, by establishing the World Islamic Mint, and under auspices of the Muslims of Granada, minting the first Gold Dinar coins. After a gap of more than half a century, the Prophetic Sunnah of using Gold currency had been reestablished. And there was no going back now!
The Gold Dinar movement quickly gained appeal among the Muslims. Many rulers were also approached, who tentatively agreed to officially adopt the Gold Dinar in their countries. This included Necmatin Erbakan, the then Prime Minister of Turkey under the Refah party, and the Sultan of Morocco, but unfortunately, circumstances did not permit both of them to hold on to their promise.
In the meantime, in 1995, the first Gold Dinar coins had by now hit the streets of Malyasia, and people at the grassroots level had started adopting them for savings and trade. A whole literature gradually developed on the Dinar economy, beginning with Umar Ibrahim Vadillo’s publication of “The Return of the Gold Dinar” from Cape Town, South Africa. With extensive references to the Muwatta of Imaam Maalik, it explained in detail the Islamic rulings on the prohibition of using debt-based fiat currencies, and systematically debunked the arguments of Islamic Banking apologists. In the following year, Umar Ibrahim had a landmark meeting with President Mahathir Mohamad of Malaysia, and presented to him his “White Paper on the Gold Economy”.
As Umar Ibrahim was compiling his case based on Shariah law, many western and secular economists themselves independently arrived at the same conclusions as we had learned from the Quran and Sunnah: The beneficial effects to economic stability and growth by adopting commodity money. Known in the Academic world as the Austrian school of economics, it featured leading proponents like Ludwig Von Mises and the Nobel Laureate in Economics, Friedrich Hayek. The Austrian school has since then systematically debunked many of the false objections and mistaken myths that are raised so often against gold and silver currencies, very often by indoctrinated finance students, or those with a vested interest in the current Riba based system.
As the Dinar movement gained momentum, President Mahathir Mohamad of Malaysia became one of its most high profile proponents. Unable to institute the recommended changes during his office, he still continues to attend seminars and express his support for the movement, including being the guest of honor at the 1st World Riba Conference in 2010.
Bereft of government support from any quarter, or even from any established Islamic Banking or finance establishment, the Gold Dinar movement slowly continued to take root in the people of Malaysia and Indonesia. In 1998, the Islamic Mint Nusantara was established in Indonesia, catering to the local demand of Dinars and Dirhams. It is operated on partial waqf basis, and is gradually developing a mobile based dinar and dirham payment system called Dinar First.
In the same year, another success was achieved at the political level when the Islamic Party of Malaysia, PAS, became the first political party to openly endorse the Gold Dinar.
Realizing the needs of the modern fast paced business environment, an electronic payment system based on the Gold Dinar, called e-dinar limited, was launched from Malaysia in the year 2000, following closely by large scale production of dinars by the Islamic Mint, Dubai. By 2009, the coin turnover of e-dinar surpassed a massive 150,000 pieces per anum.
Along with these practical initiatives, work on creating awareness and educating the masses also kept going, with a high profile seminar “Gold in Multi Lateral Trade” conducted in Kuala Lampur and hosted by Prime Minister Mahathir Mohamad. The Royal Mint of Malaysia also minted its first batch of Gold Dinars in 2003 and the far east quickly became the hub of all Gold Dinar activity at that time, with the University Sains Malaysia in Penang setting up a dedicated Gold Dinar Research Group representing Academic recognition of the Dinar movement, followed by widespread publications.
The dinar movement was also strongly endorsed by many eminent Ulema and religious scholars, most notable being Sheikh Imran Hosein.
In Pakistan, the very first person to point out the ills of the western economic system, and suggest a reformation towards the Riba free Islamic model was none other than its founder, Muhammad Ali Jinnah himself. In 1948, at the most befitting occasion of the inauguration ceremony of the State Bank of Pakistan, he said:
"I shall watch with keenness the work of your Research Organization in evolving banking practices compatible with Islamic ideals of social and economic life. The economic system of the West has created almost insoluble problems for humanity … We must work our destiny in our own way and present to the world an economic system based on true Islamic concept of equality of manhood and social justice. We will thereby be fulfilling our mission as Muslims and giving to humanity the message of happiness and prosperity of mankind."
But it was 60 years after he laid down this vision, that his dream started to become a reality when the Dinar movement came to Pakistan.
In 2009, Pakistan’s very first commercial enterprise devoted to the gold dinar was established with the name Egold Private Limited. As would be evident to sound money advocates, the inspiration for this name was drawn by the pioneering company of Dr. Douglas Jackson of Florida. Egold offers not only the sale of dinar and dirham coins, but also depository services for safekeeping of the dinars, and secure electronic transactions through its website. Unlike western gold investment initiatives that are incorporated in offshore tax havens, eGold is registered in Pakistan and is fully compliant with local laws while allowing people to transact business in Dinars and Dirhams.
In another recent development, an internal document was circulated by the Dallas chapter of Pakistan Tehreek-e-Insaaf, encouraging the party to officially adopt the gold dinar. It is yet to be seen, if the gold dinar movement can gain mainstream support from any religious or political party in Pakistan.
Indonesia, however, became the de facto capital of the Dinar movement, where the movement’s founder and chief architect, Umar Ibrahim established the Wakala Induk Nusantara, the central body for dinar and dirham distribution working under the auspices of the World Islamic Mint. A novel structure of loosely connected independent Wakalas, or Dinar Agencies, were setup, in order to reach greater penetration in the society, and it was here on the islands of Nusantara that the usage of the Gold Dinar in its true ultimate vision, as medium of exchange in day today transactions, was realized at the grassroots level. There are now more than 75 local wakalas affiliated with Wakala Induk Nusantara, including some as far away as Australia and Singapore, distributing thousands of coins. Just like the Credit Card display signs, shops are now putting up the “We accept Dinar” stickers on their windows.
One of the movement’s greatest moments of triumph, however, came in August 2010. After many years of activism, negotiations and preparation, Umar Ibrahim Vadillo managed to win support from the Government of the Malaysian state of Kelantan, which adopted the Gold Dinar as the official state currency, alongside the Malaysian Ringgit. Special coins were minted under the global overseeing body for all Dinar and Dirham coin products, the World Islamic Mint. These coins possessed enhanced security features and came embossed with the State Emblem and “Government of Kelantan” inscribed on them. In its launching ceremony, for the first time after many decades, Zakat was again distributed by a Muslim government in Shariah currency, and state employees were given the option to receive a percentage of their salaries in the Gold Dinar.
The event was covered by leading financial news networks around the world, and the Wall Street Journal wrote, “If there's a utopia being formed for the globe's gold bugs, it's happening in a few unexpected outposts in the Muslim world like Kelantan”. The Kelantan launch created a domino effect in the region, with the Sultan of Sulu expressing his own interest to follow suit.
Shaykh Abdulqadir described it as the single most historic moment for the Muslim Ummah in the twenty first century .
The gold dinar movement has also reached the United Kingdom with a Dinar exchange setup there in partnership with edinar and Wakala Nusantara. Local dinar agents are currently active in Birmingham, Edinburgh, Sheffield, London and Glasgow, and public awareness is being created by conducting road shows, so people can feel and touch the dinars in their hands and also learn about them.
From as far back as the 1700s, Muslims have been an integral part of the American community.
And so it was that the indigenous Muslims of America, much more than the immigrant community leaders, were the first ones to recognize the common thread that bound their faith with the ideals and principles set forth by the founding fathers.
Almost a hundred years ago, Ustadh Muhammad IzzudDeen setup an organization, the Adeynu Allahi Universal Arabic Association, that is now represented by Jamia Masjid Baytul Khaliq in New Jersey. They have initiated a project, in a certain way similar to the libertarian Free State Project, to establish a local community of Muslims called Amirate America, and have minted their own 10.5 dirham coin, which is probably the very first dirham ever to be produced on US soil.
Another dinar initiative has been started by a division of the world murabitun movement, by the name of Blackstone foundation in North Carolina. They are developing open markets according to Islamic muamilaat, and also adopting the Dinar and Dirham within the ranks of their community.
A third initiative coming out of Austin Texas is Dinar Wakala, which offers the sale of Dinar and Dirham coins, and is also developing a bullion depository institution, to be called a “Wakala”, which is the Arabic for Agency. Dinar Wakala is producing the very first full series of Dinar and Dirham coins of America, in cooperation with another local sound money initiative, the American Open Currency Standard. The AOCS is inspired by the visionary founder of liberty dollar, Bernard Von Nothaus, and is working to galvanize all the followers of sound money to come together and implement a working specie-backed barter system in America. The AOCS certified mints have already produced numerous gold and silver coins for use in its merchant network, and the Silver Dirham is soon to be a newest addition to its diversified lineup.
Looking at all these global initiatives, we see today that the Gold Dinar movement has reached an unstoppable momentum, with the Ummah whole heartedly embracing the currency of Medina, the Gold Dinar.
It is an idea whose time has come. It is not only a Sunnah of the Holy Prophet, but also our only hope to establish a Riba free financial system in modern times.
Come, join our hands, and embrace the gold dinar movement. A movement that has no national boundaries; No political, sectarian or personal agendas! It is a spontaneous reaction of the learned of the Ummah to stand up and practically adopt a Riba-Free medium of exchange in their lives. The freedom and ability to use gold and silver as a medium of exchange is your basic religious and human right. And being a Sunnah of the Holy Prophet, no government or territorial authority on Muslim lands has any right to prevent you from doing so.
The decision to discard usury and adopt the Islamic Gold Dinar is now in your own hands alone... Choose wisely... Choose Allah, and his book… Choose the Sunnah of the Prophet... Choose the Gold Dinar….
And let those, who are working to revive it, rejoice in the blessed words of the Holy Prophet “Sallallah hoe alaihe wa sullum”
Whoever revives an aspect of my sunnah, after it has been abandoned, he will have a reward equivalent to that of the people who follow him, without detracting in the least from their reward.
The Gold Dinar of Madinah
Produced & Directed By:
Special Thanks To:
Shaykh Dr. Abdalqadir as-Sufi
Hajj Umar Ibrahim Vadillo
World Islamic Mint
Wakala Induk Nusantara
Sheikh Imran Hosein
Riki Rokhman Aziz
Digital Gold Currency Magazine
American Open Currency Standard
Ludwig von Mises Institute
U.S. Congressman Dr. Ron Paul
Credits for Music and Technical Resources:
Yahoo! News Network
Free Royalty Free Music by DanoSongs.com
Pakistan Television (PTV)