Gold vis-à-vis money in Islam: the case against Dinarist Movement

Mohamad, Azhar; Sifat, Imtiaz

doi:10.1108/ijlma-06-2016-0061

Cited by 4 publications

(4 citation statements)

References 8 publications

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“…In this regard, Oziev and Yandie (2018) critically analyzed bitcoin's nature and features and identified no contradiction of bitcoin with Islamic laws. Much has been written about the status of money and its role in the overall economy after the seminal work of Nakamoto in 2008 (Figuera and Tortorella Esposito, 2019;Mohamad and Sifat, 2017;Oberauer, 2018).…”

Section: Stream 2: Islamic Fintech and Distributed Ledger Technologymentioning

confidence: 99%

Fintech in islamic finance literature: A review

Alshater

Saba²,

Supriani³

et al. 2022

Heliyon

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Section: Stream 2: Islamic Fintech and Distributed Ledger Technologymentioning

confidence: 99%

Fintech in islamic finance literature: A review

Alshater

Saba²,

Supriani³

et al. 2022

Heliyon

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“…Considering the Sharīʿah's perspective of money, the centralization of money is not a fundamental or essential criteria of money. Dirham and dīnār were not controlled by the Prophet (PBUH) nor by his caliphs during the early age of Islam (Mohamad & Sifat, 2017). However, some scholars consider centralization as a protection of wealth as the government protects the people's wealth from misfortune in financial activities.…”

Section: Digital Assets and The Concept Of Wealth In The Sharīʿahmentioning

confidence: 99%

The Concept of Wealth (māl) in the Sharīʿah and Its Relation to Digital Assets

et al. 2022

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The study aims to address the concept of wealth from the perspective of the Sharīʿah and its relationship to contemporary digital assets such as cryptocurrency (Bitcoin). The qualitative research approach is adopted for this research. The data is collected from several resources such as books, journal articles, reports, conferences papers, and websites. The data is analyzed through an explanatory research approach by providing scholars’ opinions and their arguments on the subject matter. The findings of this study show that Sharīʿah provides certain conditions to consider something as asset or currency from the Sharīʿah perspective. In regard to cryptocurrency (Bitcoin), the Sharīʿah rules vary based on the types of cryptocurrencies and whether cryptocurrency meets the conditions to be considered as currency or assets. Moreover, either cryptocurrency is an asset or currency, it should not contravene any Sharīʿah laws, such as ribā (interest) and gharar (uncertainty). Since Sharīʿah does not limit the currency to dirhams and dīnārs, Bitcoin can be considered as an alternative to the current currencies in a digital form. This would enable financial markets to move faster and secure transaction methods in the future. The policymakers might find this study beneficial to issue new guidelines and policy documents. The findings of the study might be interesting for cryptocurrency enthusiasts and investors to have a deeper understanding of cryptocurrency from the Sharīʿah viewpoint.

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“…He further argues that price stability and exchange rate stability is attainable under a fiat money system through proper economic management. Mohamad and Sifat (2017) argue against metallic money because of stated reasons including lack of juristic support for metallic money only, price of metallic money (more than fiat), debasement of metallic money, volatility in metallic prices, limited supply of gold in traditional Muslim communities and the issue of gharar (uncertainty). On the status of fiat currency, the Islamic Fiqh Academy (IFA) (1986) resolves that "paper money is real money, possessing all characteristics of value and subject to Shari'a rules governing gold and silver vis-à-vis usury, zakat, salam and all other transactions" (Resolution no.…”

Section: Islamic Currencymentioning

confidence: 99%

Developing a fair currency system

Hanif

2020

IJIF

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Purpose This study aims to evaluate the role of the prevailing currency systems in achieving (or departing from) the socio-economic objectives of a progressive and just society; i.e. featuring stability and equitable distribution of wealth. Design/methodology/approach After documenting historical developments in currency systems, the study reviews the Islamic perspective on the matter. Features of an ideal currency system are listed and then a critical evaluation of existing currency systems – fiat, banking and cryptocurrency – is undertaken. Findings It is found that existing currency systems – fiat, banking and cryptocurrency – are not compatible with the socio-economic objectives of a forward-looking, progressive society, which upholds transparency and justice as its core values. The study documents that Sharīʿah norms have no preference or dislike for any of the existing currency systems. Any prudent currency system compatible with the objectives of the Islamic financial system (i.e. stability and equitable distribution of wealth) is acceptable. A single international reserve currency (with country-specific legal tendering) is subject to the risk of destabilisation across global markets. Practical implications This paper recommends autonomy of central banking, the spending of seigniorage for the welfare of community members, development of asset-backed currencies (following ṣukūk structures), as well as multiple international reserve currencies and joining of hands by professionals and Sharīʿah scholars to design a currency system compatible with the Islamic financial system. This paper’s recommendation is against the adoption of cryptocurrency that lacks the backing of real assets. Originality/value The study contributes to the literature by evaluating the compatibility of existing currency systems in the achievement of socio-economic objectives of a welfare state which seeks to uphold justice and equitable resource distribution as core values in the financial system.

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Gold vis-à-vis money in Islam: the case against Dinarist Movement

Cited by 4 publications

References 8 publications

Fintech in islamic finance literature: A review

Fintech in islamic finance literature: A review

The Concept of Wealth (māl) in the Sharīʿah and Its Relation to Digital Assets

Developing a fair currency system

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