Islamic State's New Currency Is Monkey Nuts

Sam Kiley, Foreign Affairs Editor
Islamic State's New Currency Is Monkey Nuts

The so-called Islamic State is to issue its own currency. Crikey! The truth, though, is that the whole story is monkey nuts.

The death cult is planning to release an "Islamic Dinar" in gold, apparently worth $140 (£90), with smaller denominations of silver and copper. They'll be worth only their weight in the metal they are made from.

The "Caliphate" has pretensions to statehood and so running off coins and stamping them with Koranic verses helps shore up that image.

The plan for an official currency was announced last November to allow IS to "emancipate itself from the satanic global economic system".

It won't work, though.

The Islamic Dinar will only be a "representative currency" - in other words exchangeable for a fixed amount of a certain commodity, or in this case actually made of the stuff with a specific value.

So IS will only be able to mint as much currency as it has raw material.

Iraq and Syria produce no gold, silver or copper - so the IS money supply will be set by the amount of precious metals it can lay its hands on. That's a lot of theft and recycling.

The money could never become a "fiat currency" - which is what the euro, the pound, the dollar and almost all others are - holding value based on the faith that other parties will accept it.

The amount of coin in circulation in IS would be defined only on the basis of the value of the metal in the coins themselves - so the economy could never properly expand.

But the minting of the money has served another significant purpose. It's garnered yet more publicity for IS.

Seeking to constantly focus attention on itself, IS has, over the last couple of weeks, issued videos of new techniques to murder alleged "spies".

These include decapitation by explosive, execution by rocket-propelled grenade, dismemberment on a crucifix and drowning.

That's the horror we've come to expect. But it's also begun putting out English-language appeals to recruit civilian medical staff amid others that boast of the administrative success it's had in areas under its control.

IS, though, is a hate cult. One that murders all those who fail to subscribe to its vision of Islam, and that eradicates all evidence of competing cultures, even those from the ancient world.

It's hard, therefore, to see how its pretensions to statehood can ever be realised.

States, after all, trade with one another. And when IS wants to buy arms or fuel, food or medical supplies, it's going to find it hard to exchange goods for even its gold coins. In black market trade, the US dollar remains supreme.

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