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Islamic State group announces own currency free from 'satanic' banks

Screen grab of a propaganda video by the IS group.

The Islamic State group (IS) announced the launch of its own currency in a video posted online at the weekend, saying it would release Muslims from “enslavement by satanic banks”.

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The jihadist group showcased its gold, silver and copper coins in an hour-long video released on Saturday, August 29, touting the “return of the Gold Dinar” – a currency originally used in the early days of Islam.

The announcement comes two months after IS first released pictures of the new currency it planned to use in the so-called “Caliphate”, a territory carved out of vast swathes of Iraq and Syria.

It marks another step in the group’s efforts to establish itself as a functioning state.

The IS group already boasts of its own territory, armed forces, services (including schools and hospitals), and judicial system. It also raises taxes – the “jizzieh, imposed on religious minorities – in the areas it controls.

FRANCE 24’s Wassim Nasr, an expert on jihadist networks, said the currency’s launch followed a double imperative for the IS group, which has amassed a war chest of millions of dollars through tax collection, seizing oil refineries, smuggling and kidnappings for ransom.

“The first imperative is religious: according to Islam’s precepts, only gold and silver should be used as exchange currencies,” Nasr said, noting that the IS group often referred to this precept in its propaganda videos.

“The second reason is to break away from an international monetary system they describe as unfair and enslaving, but which they were previously obliged to use in order to access Iraqi, Syrian and even US currencies,” Nasr said.

Gold standard

The video, which featured numerous illustrations and lengthy arguments, claimed international finance was incompatible with Islam because of its use of interest rates.

The wealth of detail, ranging from the introduction of gold coins in ancient Babylon to Western nations’ departure from the gold standard in the 20th century, suggested an economist had helped prepare the video.

Aside from religious considerations, the insistence on gold appears to make commercial sense for the jihadist group.

While traders are always likely to accept gold as a means of payment, nobody would have recognized the value of paper currency printed by the IS group.

But whether the jihadist group succeeds in imposing its currency, or even mint the coins in sufficient quantities, remains an open question.

The group has not yet distributed the new gold, silver and copper coins across the territory it controls. Nor has it banned the use of local currencies.

“There are two ways IS can go about imposing its currency,” said Nasr. “One is to impose the use of gold coins for all major transactions between businessmen and the government”.

“The other is to convert civil servants’ pay into the new currency, and force the population to buy their staples with silver and copper coins.”

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