ISIS Using Precious Metals for Currency
The background of ISIS and their currency plans for the middle east
Islamic State militants have announced on jihadi websites that IS has plans to mint its own currency. Early last year, IS seized large portions of Iraqi and Syrian territory. The militant group then proclaimed a caliphate on all lands under its control and IS leader Abu Bakr al-Baghdadi proclaimed himself caliphate. The group plans to issue the currency in the IS-controlled areas throughout Syria and Iraq.
The militant group is reportedly acquiring gold, silver and other precious metals. In a recent report from online news agency McClatchy, which contains interviews with precious metal dealers in northern and western Iraq, a Fallujah-based gold trader reported that foreign jihadis were buying all the gold and silver they could find in local markets, forcing local dealers to travel far and wide to find metal to replenish their inventories.
Reports from those dealers indicate that the group may well be on its way to amassing enough metal to begin minting now.
the isis treasury department and their coinage plans
21-carat gold and silver coins will be based on the Islamic dinar from the 634 CE used during the Caliphate of Uthman.
Islamic State websites have released the denominations in which coins will be minted including a 21-carat five gold dinars, 21-carat one gold dinar, 10 silver dirhams, five silver dirhams, one silver dirham, 20 bronze floos and 10 bronze floos.
- The 21-carat five gold dinars has a map of the world.
- The 21-carat one gold dinar bears the symbol of seven stalks of wheat.
- The 10 silver dirhams shows the Al-Aqsa Mosque in Jerusalem.
- The 5 silver dirhams show a minaret symbolizing Damascus
- The 1 silver dirhams show a sword and shield
- The 10 bronze floos carries the symbol of the crescent moon
- The 1 bronze floos shows palm trees.
creating a currency: is it worth it?
Creating a currency is easier than it sounds. Just gather enough precious metal to make the investment worthwhile, decide on denominations and convince a significant number of people to use that currency. Creating your own currency will allow you to control the monetary supply and inflation rate.
The pros of creating a currency
For IS, minting coins is a politically savvy move in its attempts to act as a government. “It's brilliant," says Patrick Heller, a numismatic expert and owner of Liberty Coin Service in Lansing, Michigan. "ISIS is trying to pretend it's a government. And one of the things that governments do is set a monetary standard, and issue coins and even currency."
The new coinage could provide intangible benefits as well, even if it doesn't catch on as a currency. It would provide ISIS sympathizers the world over with a way to show support for and loyalty to the group.
the drawbacks of creating your own currency
Creating a currency brings with it some obstacles. For IS, those hurdles are mostly logistical. Even if the group is able to acquire enough metal, minting and distributing the coins will be an issue. Also, to enforce a mandate that the currency be used exclusively in its zones of control, the group will have to spare manpower.
Given that any profits accrued by the militant group are the result of terrorism and other illegal activities, IS currency would likely be refused by international banks and corporations. And because the currency is based on gold and silver, the value of the coins would be set by the global metals market. The currency would be subject to the same ups and downs of the market from which the group is purportedly trying to protect itself.