THE IMPORTANCE OF THE DINAR AND THE DIRHAM

Ibn Khaldun wrote in his book "Al-Muqaddimah":
"The Revelation undertook to mention them and attached many
judgements to them, for example zakat, marriage, and hudud,
etc., therefore within the Revelation they have to have a reality
and specific measure for assessment [of zakat, etc.] upon
which its judgements may be based rather than on the non-
shari'i [other coins]. Know that there is consensus [ijma] since
the beginning of Islam and the age of the Companions and the
Followers that the dirham of the shari'ah is that of which ten
weigh seven mithqals [weight of the dinar] of gold. ... The
weight of a mithqal of gold is seventy-two grains of barley, so
that the dirham which is seven-tenths of it is fifty and two-fifths
grains. All these measurements are firmly established by
consensus."

The primordial uses of the Dinar and the Dirham are:

TO SAVE
Gold or silver are the most stable currency the world has ever
seen

From the beginning of Islam until today, the value of the Islamic
bimetallic currency has remained surprinsingly stable in relation
to basic consumable goods:

A chicken at the time of the Prophet, sallallahu alaihi wa
sallam, cost one dirham; today, 1,400 years later, a chicken
costs approximately one dirham.

In 1,400 years inflation is zero.

Could we say the same about the dollar or any other paper
currency in the last 25 years?

In the long term the bimetallic currency has proved to be the
most stable currency the world has ever seen. It has survived,
despite all the attempts by governments to transform it into a
symbolic currency by imposing a nominal value different from
its weight.

Reliability.

Gold cannot be inflated by printing more of it; it cannot be
devalued by government decree, and unlike paper currency it is
an asset which does not depend upon anybody's promise to
pay.

Portability and anonymity of gold are both important, but the
most significant fact is that gold is an asset that is no-one else´s
liability.

All forms of paper assets: bonds, shares, and even bank
deposits, are promises to repay money borrowed. Their value
is dependant upon the investor's belief that the promise will be
fulfilled. As junk bonds and the Mexican peso have illustrated,
a questionable promise soon loses value.

Gold is not like this. A piece of gold is independent of the
financial system, and its worth is underwritten by 5,000 years
of human experience.

TO PAY ZAKAT
Zakat cannot be paid with a promise of payment

Zakat can only be paid with tangible merchandise, called in
Arabic 'ain. It cannot be paid with a promise to pay or a debt,
called in Arabic dayn.

From the begining the zakat was paid with dinars and
dirhams. Most significant is that the payment of zakat was
never allowed in paper money during all the ottoman period
right until the fall of the Khalifate.

Shaykh Muhammad Illish (1802-1881), the great maliki cadi,
said that if you were to pay zakat with paper-money only its
value as merchandise (dayn), that is, its value as paper can be
accepted. Therefore, its nominal value is irrelevant as payment
of zakat.

Shaykh Illish wrote:
"If the Zakat was obligatory by considering its substance as a
merchandise, then the nisab would not be stipulated according
to its value but according to its substance and its quantity, as is
the case with silver, gold, grain or fruits. Since its substance
[paper] is irrelevant [in value] in respect to the Zakat, then it
should be treated as the copper, iron or other similar
substances.'

Zakat cannot be paid in paper money (American dollars for
example). This is a serious innovation (bid'ah) in one of the
five pillars the deen of Islam.

For those not familiar with the fiqh on zakat I will quote from
the Se'adet-i Ebediyye or "Endless Bliss" written by Husain
Hilmi Effendi (the founder of Ihlas Foundation) in 1956. It is


not a book of the maliki fiqh [which we use], but it is a book
supported by the people who use the name "Ahl al-Sunnah"
and it can enlighten the understanding of our "de facto" 'alims.
For those who do not know about this book, this is preface
note of the book itself: "Se'adet-i Ebediyye is a book prepared
according to the Hanafi madhhab. There is not any knowledge
or word, which contradicts the creed of "Ahl-i Sunnat and
Jama'at in this book." Here are the relevant quotes:

"the zakat of paper money is to be given in gold. It cannot be
given in paper money"

"It is haram to accept any money which is not gold or silver as
zakat or kharaj [from Harun Rashid]"

"Ignorant people say, "Paper money cannot be compared to
bonds [which are not acceptable as payment of zakat] written
out between two people. It is day's currency. It has become
attested universally. It is indispensable to give it today." They
should not be believed. Something cannot be universal,
indispensable or permissible by the word of us the populace."

"In none of the books written or the fatwas given during that
long period [the Ottoman Empire] has it been said or stated that
the zakat could be given in paper money."

The return to the payment of zakat in gold and silver is an
essential part of the re-establishment of Islam.

We must be particularly aware of those who say 'it is not
practical to pay zakat in gold and silver'. This is a false
argument, not the issue. The issue is the fulfilment of the Allah's
Law. We must work towards the establishment of the Law. The
return of the gold Dinar, like the return of the Khalifate, may or
may not appear to be practical yet no Muslim can deny that these
are our obligation.

TO BUY AND SELL

The Dinar and the Dirham are the currency of the Islamic
UmmahNo more hundreds of different paper currencies
diseased with inflation.

A piece of gold is equaly valid wherever you are in the world.

In the past, Muslims were able to travel throughout the Islamic
world and trade with dinars, as theycould at home. From the
XV century onwards the Europeans started to introduce the
banking promisory note in Muslim lands. Paper money gave
European traders an incredible purchasing power that
overwhelmed and eventually surpassed the Muslims'
superiority in world trading.

Gold was money well into this century, and for at least two
centuries before, most bonds, including govern-mental ones,
were gold bonds. But after the First World War, since the
financial demands of the war led governments to print paper
money in excess, the convertability to gold was first suspended
for the most part, and finally terminated.

How important is the dinar and the dirham to the deen of
Islam?

Al-Qurtubi (d. 1273), one of the greatest commentators of
Qur'an, wrote in his renowned Tafsir about the following ayat
of Qur'an,
."O you who believe! Obey Allah and obey the Messenger and
those in command among you. ..."
Qur'an, 4, 59

that the ayat is an order to "obey the Sultan with respect to
seven things: the minting of the dinar and the dirham, fixing
weights and measures, legal judgements, Hajj, Jumu'ah, the
two Eids and Jihad."

The minting of the dinar and the dirham is therefore the first
obligation of the Sultan to be commanded and to be followed