The document discusses the history and principles of the Islamic gold dinar currency system. It provides background on the original gold dinars used in early Muslim societies [SENTENCE 1] It then explains how the modern proposal of the Islamic gold dinar system involves creating an electronic payment system backed by gold to provide currency stability without being influenced by the instability of other major currencies like the US dollar. [SENTENCE 2] The document outlines several benefits of the Islamic gold dinar system including providing a stable monetary value, minimizing speculation and manipulation, and promoting a just economic system. [SENTENCE 3]

1. PHILOSOPHY & PRINCIPLE OF ISLAMIC
BANKING (ISB 546)
THE ISLAMIC GOLD DINAR
Presented by: EKA PUSMAWATI BT ABD WASIR
HUZAIMAH BT JAIMIN
SOFIAH BT ARIP
SMELTA AK JUDI
WAN RASHIDAH BT WAN HASSAN

2. History of Gold Dinar
Muslims used gold and silver by weight
and the dinar and dirhams that they used
were made by the Persians
These coins differ from the original ones in
that an Arabic inscription is found in the
obverse margins, normally reading "in the
Name of Allah“
Gold and silver coins remained official
currency until the fall of the Khalifah

3. Modern History
 the Islamic Dinar system being proposed in this modern
era is basically an electronic payment system that is gold
backed
 As a consequence of currency crisis in Asia, in first of
1997, then Prime Minister of Malaysia Mahathir Bin
Mohamad proposed introduction of Islamic Gold dinar as
currency for international trade in the Muslim world
 . It was supposed to suppress the too overly traded
American dollar and ensure that dollar’s instability does
not affect international trade because Islamic gold dinar
was to be tied to price of gold and thus provide stable
value of the currency

4. Introduction of Gold Dinar
Gold dinar known as an Islamic currency and
which is to protect its sovereignty and to promote
a just monetary system, a nation my have to
redefine money and eliminate interest rates from
the economy
• Claimed by a Muslim scholar, Ibn Khaldun that
God created the two precious metals, silver and
gold to serve as a measure of all commodities
• Gold had played an important role for many
centuries in a way or another until the end of
Bretton Wood’s system

5. Differences between Current Monetary
System & Dinar System
Current Money System
Paper money quantity can be increased at
will any time since there will always be
demands from the public to increase the
quantity of money which would cause
inflation
Dinar system
Fixed exchange rates resulted the absence of
exchange rate instability

6. Why Gold Dinar?
Problems in the current monetary
system
Money Creations: The Magic of fiat
money and fractional reserve
banking
Islamic Banks, Money Creation and
the Law of One Price
Socio Economic Effects of Money
Creation

7. Implication of the Islamic Gold
Dinar System
Stable Money
Excellent Medium of Exchange
Minimize Speculation, Manipulation and
Arbitrage
Dinar Promotes a Just Monetary System
Some Special Problem Reduce
Dinar Diversifies Risk and Promotes Trade
Business Cycle Effect Minimized

8. How Dinar can help in Economic
Crisis?
Gold does not inflate in value as it is a
commodity and thus has an intrinsic value
If gold coin were used, then counterfeiting
would also be checked
If all these exchange rates are eliminated by
means of a single currency like the dinar,
then speculation, arbitrage and
manipulation will be very much removed if
not eliminated

9. Future Prospect and Challenges
Many people are aware of the
shortcomings of the present system and
advancement in IT technology such as the
emergence of e- dinar, Gold Money and so
on
Does not required substantial new
regulations
Gold has high prospect as a single global
currency

10. The challenges
Institutional setback
US have emerged as sole superpower in the
world today after the cold war’s where US
dollar play the roles as international
currency
Possible attempts to fail the system
The success of this system depends on a
gradual increase in the number of people
using gold as money

11. Opinion from Islamic Jurisprudence
about Islamic Gold Dinar
Price of stock market can give the
dramatically effect as the Dollar continue
to drop
Gold Dinar wants to threat U. S Dollar
because some of those economies have not
fully recovered
Former Prime Minister Mahathir Mohamed
said that Arab Saudi should sell oil for gold
not the dollar in order to avoid being short
changed by a decline in U. S economy

12. Conclusion
 Islamic Gold Dinar and the Dirhams or the silver
coins should been applied in Malaysia in order to
overcome the most if not all the shortcoming and
the negative effects of the present day fiat money
interest- based system
 The gold dinar and the silver dirhams called for the
re- establishment of shariah base trading
 The movement of Islamic Gold Dinar and the Silver
Dirhams had been stable compared to paper
money and had been proved by using the Gold
Dinar and Silver Dirhams as money is not a step
backwards into the medieval years

13. THANK YOU