JERUSALEM – In its bid to win recognition as a sovereign political entity, Islamic State (IS) has announced its intention of minting its own coins, to be used independently of the international financial system in territory under its control.
IS, in an official announcement, said the new currency will enable it to break away from the "tyrannical financial system imposed on the Muslims, which has been a factor in enslaving and impoverishing them."
The organization said that the monetary system it is creating will lead to the downgrading of the dollar and the eventual collapse of the U.S. economy. By imposing the dollar as the sole currency for determining the price of oil, said the statement, the United States was "stealing the Muslims money and resources to finance its own economy."
If IS succeeds in establishing an independent currency, wrote Ofir Winter, a researcher at Tel Aviv’s Institute for National Security Studies, it would consolidate its hold on the territories it controls. "It would improve its prestige" and "strengthen the sense of governance it projects at home and abroad," Winter wrote in a report for the Institute for National Security Studies.
The projected currency is to consist entirely of coins. According to the radical Salafist doctrine of IS, paper currency is responsible for inflation, depression, and other economic crises. The doctrine also rejects bond trading, usury, and money changing. The coins—made of gold, silver, and copper—are seen as having intrinsic value, providing confidence that they will not lose value if there is a drop in exchange rates.
The first currency issue is to include seven coins, said the official statement; their respective weights and metals chosen with regard to Islamic law. The three main coins are to be the dinar (4.25 grams of gold), the dirham (2.975 grams of silver), and the fils (0.496 grams of copper). The ten dirham coin is to depict al-Aqsa Mosque in Jerusalem, indicating that it is a future target for IS, according to Winter. The five-dinar coin will show the five continents, reflecting a tradition that Islam will rule over the earth, from its eastern to western ends.
There have been recent reports that IS has purchased gold, silver, and copper for implementation of its currency scheme, which is being launched upon the direct order of IS leader, Abu Bakr al-Baghdadi.
"The international community would do well to intensify pressure on IS," wrote Winter, in order to interdict its attempt to solidify its economic standing with the populations under its control.
The scholar suggested continued interference with IS’ attempt to sell oil from fields it has captured to traders in Turkey.
Additionally, he wrote, "the international community must begin to formulate a plan to reconstruct Iraq and Syria to ensure a positive economic outlook for their impoverished populations and prevent them from being led astray by radical Islam."