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  1. 1. 9 Advantages of the BPALC and E-Dinar SystemBPALC System - Proposed ByMalaysian GovernmentE-Dinar - Private Electronic GoldPayment Company 1. Controlled by the central banks of theimporters and exporters.1. It is privately owned2. The importers and exporters could usethe bank facilities to finance theirtrade.2. Eliminates the needs of the third parties3. No physical gold is transferred, only if necessary3. Open to all who want trade or maintainaccount in gold denomination4. Eliminate the exchange losses andcurrency risk 4. Real time processing transaction and nocredit exist in anywhere in the system5. It is the same as the normal BPA exceptthat it is denominated in gold5. Eliminate the exchange losses andcurrency risk 6. It could be designed according to thesyariah law6. It is designed according to the syariah law7. Suitable for big players in the importand export markets.7. Could be catered for the e-commercebusiness (small and medium industry).8. Advantages for businesses who acceptpayment in e-Dinara) Nearly instantaneous clearing and fundsavailabilityb) Low processing fee - 1%, or at most USD50 cents debited in metal9. Stable store of value and diminishedexchange risks10. Divisibility, security, fungibility, andportability. Conclusion The usage of Dinar is well rooted in history of the world though it has beenabandoned. Great strides are being made in going back to Dinar, with the support of the Government and the encouragement and guidance of Central Bank of Malaysia, toensure that Dinar becomes a truly viable alternative trading currency among OICcountries. If the OIC countries are to agree to accept the Gold Dinar, evaluation on thecapability to implement it must also be conducted.As for the implementation of the gold currency, both systems have their ownadvantages and target market. Regardless of mechanisms being used, as long as thetrade transactions use gold as their medium of exchange, it is acceptable. Theelectronic gold payment system is a promising mechanism but need more work to bedone. The technological or computer literacy plays an important role in ensuring thesuccess of the e-Dinar system. As for Malaysia’s e-commerce industry, the number of players is still small, which is 1 percent from the total online users.Failure in persuading the online users to shop online would become a major problemto the electronic payment system companies because without the online users who
  2. 2. 10 shop online, then the system proposed will only look good in theory. As for now, theBPA system looks promising because this system transacts in a large scale betweenexporters and importers in participating countries. The goods imported by theimporters then would be resold in the countries to the end consumers. On the otherhand, the wholesalers and retailers would buy from these importers and they do notdeal with the Gold currency but transact in their local currencies before distributingthe goods to the end consumers. However, with the level of acceptance in using thegold currency keeps on increasing, and with extensive promotions in the usage of E-Commerce and Gold currency, the electronic payment system using gold asdenomination could become a reality in trading system. The mechanisms are onlywaiting for us to put them in place: it is now the right time for us to act for the sake of the Al-Mighty, His Messenger, ummah and unity of the Islamic countries. 11
  3. 3. Works Cited Al Qur'anul KarimAl HadithAnonymous, "Dinar not confined to countries with bilateral paymentarrangement" Utusan Online 3/5/2002 Available:http://www.utusan.com.my/utusan/archive.asp?y=2002&dt=0502&pub=Utusan _Express&sec=Front_Page&pg=fp_03.htm, 1/5/2002.Anonymous, "Mooting The Usage Of Islamic Dinar As World Currency", NewStrait Times - Management Times, 30/1/2002.Anonymous. "Dinar Emas: Malaysia Boleh Guna Dengan Negara Islam".Utusan Malaysia. Kuala Lumpur 23 Oct 2002.Anonymous. "Gold Dinar Transactions Can Be Carried Out Via Debit Cards". UtusanMalaysia. KUALA LUMPUR April 29.Anonymous. Western World Would be Unwise to Ignore Proposal for Gold Dinar Currency Among Islamic Countries ; available atwww.minesite.com/features_archive (16 December 2002).BBC News, Oil and Gold Prices Surge , http://news.bbc.co.uk, 11 September 2001.Bookwright of Denmark. " A Young Muslim's Book of Money". Available:http://www.bogvaerker.dk/Bookwright/Money.html.Chapra, Dr M Umar. " Monetary Policy in an Islamic Economy" Money andBanking in Islam. International Centre for Research in Islamic Economics,King Abdul Aziz University, Jeddah. 1983.Dato Sri Dr Mahathir Mohamad " Merealisasikan Dinar Emas." Utusan Malaysia.27/3/2002.Daly, Bill. “Pennsylvania Dutch” Social Credit Egroup. Socialcredit@topica.comE-Dinar Ltd . "History of the Dinar" Available: http://www.e-Dinar.com/en/ Emarketer http://www.emarketer.com/ Hj. Zainal Abidin , Amat@Anwar. Sejarah Penggunaan Matawang Dinar. Proc. of National Dinar Conference. Kuala Lumpur 2002. Kolej Universiti IslamMalaysia, 2002.Jantan, Haji Osman. Pedoman Muamalat dan Munakahat. Pustaka Nasional Pte Ltd.Singapore. 2001.Jason Hommel, Gold & Hypothetical (constant) Growth Rates ,www.geocities.com/bibleprophesy/goldrates.htm, 2000.Konac, Enver Hakan. " The East Asian Crisis: Lessons for OIC Countries".Journal of Economic Cooperation 21, 2 pg 15 - 24, 2000.Lietaer , Bernard Global Currency Speculation And Its Implications. InternationalForum on Globalization (IFG) seminar. 1997.Mark Skousen, A Golden Comeback I , www.libertyhaven.com, 1998.Mushtak Parker; Malaysia Hopes to Start Using Islamic Gold Dinar in Trade
  4. 4. available at http://www.arabnews.com/Article (27 November 2002).OIC Fiqh Academy Resolutions: "What Shariah experts Says. Currency Exchange", International Journal of Islamic Financial Services Vol. 2 No.2 available athttp://islamicfinance.net/journals/journal6/art3.pdf.Peter S. Rose, Money and Capital Markets – The Financial System in anIncreasingly Global Economy , Richard D. Irwin, Inc., 1994.Reports of the working groups on 1) Transparency and Accountability; 2)Strengthening Financial Systems; 3) International Financial Crises , Bank For International Settlements. October 1998.