e-dinar, a precious metal alternative to modern monetary systems

e-dinar is an Internet payment and exchange system that facilitates online transactions 100% backed by physical gold and silver. The name of the service doesn’t imply that payments within the system are made with dinar, actually it relates to the religious views of Moslems. Abu Bakr ibn Abi Maryam reported that he heard the Messenger of Allah, may Allah bless him and grant him peace, say: "A time is certainly coming over mankind in which there will be nothing [left] which will be of use save a dinar and a dirham." (The Musnad of Imam Ahmad ibn Hanbal). e-dinar is international and accept funds in USD, Euro and AED.

How it all began

The original e-dinar company was founded in August 2000 in Labuan, Malaysia by Zeno Dahinden, of Switzerland, Dato Abdul Rahman Shariff, of Malaysia, and Fernando Vadillo, of Spain. The incorporation was purposely timed to precede a large e-dinar conference at the Islamic Arts Museum Malaysia (IAMM) in Kuala Lumpur, November 2000. At that event, both Dr. Tun Mohamed Mahathir (at that time Prime Minister of Malaysia) and his successor Datuk Seri Abdullah Ahmad Badawi received complementary sets of gold dinars and opened their e-dinar accounts publicly on stage. They were among the very first and most illustrious e-dinar account holders.

In fact the e-dinar company minted their own silver coins and gold coins in 1992. As reported by Zeno Dahinden at those times dinars and dirhams were hammered by hand. The objective of the founders was to allow common customers to possess the real value just as the mighty of this world do. The idea was prompted by the consciousness of the shortcomings associated with current monetary scheme when banks issue heaps of paper money out of nothing inasmuch as paper money is actually created from debt. Since debt is an obligation and not a value, new money draws its value from existing money and thereby devalues the currency and creates inflation says Dahinden.

Thus e-dinar team was determined to ‘help prepare the grounds for renewed monetary discipline in the face of impending financial collapse, e.g. through the ‘subprime’ fall-out’.

In late 1998 the company made the first contract with Douglas Jackson (CEO of e-gold). Then in 1999 Zeno Dahinden visited Doug Jackson in Florida where they drafted an agreement that would make e-dinar a self-contained front-end sitting on top of the e-gold database.

After finalizing a partnership with e-gold in 2000, they established their own mints in the United Arab Emirates and Indonesia. Near the end of 2003, half of the company was bought out by an unknown international corporation in the Middle East, and in July 2004 they formally separated from e-gold. The main reason for separation was the company ambition for realization of their full potential.

Under the partnership with e-gold the company depended on e-gold’s backend database and processes (e.g. bullion purchase and storage) which was found to be an obstacle in further progress. Thereby e-dinar team made a decision to separate from e-gold and in order to realize this aim they developed their own backend software and established their own bullion procurement and storage processes.

At bottom of fact

[img_assist|nid=10738|title=|desc=|link=none|align=left|width=637|height=640]The main difference of e-dinar service is that e-dinar is for the time being used primarily as a store-of-value rather than a payment system. e-dinar accounts promoted as online savings accounts which offer an alternative to Islamic banking.

Every e-dinar account holds two balances, an e-dinar balance (gold) and an e-dirham balance (silver). Each e-dinar electronic unit corresponds to an exact, fixed weight of 4.25 grams of pure 24 carat gold. Each e-dirham corresponds to an exact, fixed weight of 3 grams of .999 silver. The gold balance is displayed in e-dinar, in ounces and in grams of 24 carat gold. For silver, the balance is displayed in e-dirham, in ounces and in grams of 999 silver. Both gold and silver balances are also displayed in USD, EUR, AED, GBP, CHF and JPY.

The physical gold and silver bullion backing e-dinar and e-dirham units are always equivalent or larger than all electronic e-dinar and e-dirham in circulation. The physical gold and silver bullion is held securely in internationally renowned bullion repositories.

The value of an e-dinar and e-dirham account moves proportionally to the price of gold and silver. When a customer funds an account with e-dinar or e-dirham it means that he/she buys physical gold or silver. Thus the account balance is recorded in gold and silver (by weight). All other currencies which are displayed in the account balance fluctuate with changes in the gold and silver prices.

Customer acceptance policy

The registration procedure is not as complicated as the qualification for transactions or deposit operations. To open a new account you need to click on the corresponding ‘sing-up’ button and start filling in the registration form. But first you have to create your username and password as well as to agree to the company’s Customer Identification and Acceptance Policy.

[img_assist|nid=10742|title=|desc=|link=none|align=left|width=640|height=619]In the form you should provide your name, address, contact numbers and e-mail. Besides, you can also change your password and set up account preferences.

As a new account holder a customer is required to send e-dinar certified copies of his/her proper legal identification before wiring funds to his/her account.

The company does not publish their bank details on the e-dinar website. Hence a customer has no choice except to undergo e-dinar’s Customer Acceptance Process.


All e-dinar customers must - in addition to their contact information entered online - send e-dinar a certified photocopy of their passport or ID card before the company releases its bank contact details to them.

Small account holders who plan to buy less than 1000 USD in total gold and silver can scan and email their certified copies of passport or ID card. Large account holders who plan to buy more than 1000 USD in total gold and silver need to send their certified copies by postal mail.

Such a strict Customer Acceptance Policy and transaction control are intended to discourage unwanted elements before they enter the system. e-dinar’s Customer Acceptance Policy is based on GoldMoney’s policy which is among the strictest in the industry.

Without any verification of the customer’s identity no transaction is possible within e-dinar system.

Your e-dinar account

[img_assist|nid=10743|title=|desc=|link=none|align=left|width=640|height=640]Opening a new account is free. A customer can open as many accounts as he/she needs. Every account will have its unique account number. Once the account is created a holder can receive funds from other users.

Funding an account can be of two ways. Either a user receives an e-dinar/e-dirham payment into his/her account from another e-dinar user or he/she can buy e-dinar/e-dirham for his/her national currency. To do this a customer needs to use the "buy gold/silver" account function.

Now when you have an e-dinar account you can spend, sell and redeem you e-dinars and e-dirhams.

The Spend function allows you to make payments from e-dinar/e-dirham accounts to other e-dinar/e-dirham accounts. The spend amount will always be calculated in e-dinar/e-dirham. Yet you have option to enter the spend amount in a national currency. The amount of e-dinar/e-dirham actually spent will be calculated according to the current exchange rate.

With sell gold/silver function you are allowed to convert e-dinar/e-dirham into major national currencies by filling out the attached form and transferring the desired amount of e-dinar/e-dirham, to the e-dinar out exchange account. You will then receive a bank wire to your bank account in the national currency of your choice. The costs for the wire transfer are charged to your account.

The redeem or get coins option means that you can relinquish some e-dinar/e-dirham by taking delivery of physical gold and silver coins. As already mentioned above one electronic e-dinar corresponds to one physical gold dinar while one physical silver dirham costs approximately 30% more than an electronic e-dirham (due to proportionally higher minting costs). e-dinar will naturally send your dinars and dirhams to your postal address (additional shipping and handling fees apply).

When you buy gold or platinum you should pay the spot price and 2% spread while for silver you will pay 3% spread along with the spot price. The storage of you funds will cost you 1% a year. This fee is covering storage and insurance costs. The storage fee is calculated based on the average account balance and is deducted monthly from the account.

When you send money to another user of e-dinar you won’t be charged any fee. A processing fee is deducted from the recipient. Transaction fee is 1% of the transferred amount, but not more than 0.015 e-dinar (~ 1.90 USD) for transactions in gold or 0.5 e-dirham (~ 0.88 USD) for transactions in silver.

There is no minimum transaction size. e-dinar can be used for micro payments as well as large transactions.

Online transactions (spends) are not reversible. Once the transaction is complete, the sender cannot undo it. Accidental entry is highly unlikely. The system gives you a preview of all transaction orders prior to confirmation. Preview allows you to review applicable Exchange Rates, calculations, and other order information, to be certain the details are acceptable to you before committing the transaction. After preview, you are presented with an explicit confirming button to commit the transaction.