Either as Zakat payment, wedding Mahar or simply for safekeeping, Gold Dinar and Silver Dirhams are gaining popularity as a viable currency for Muslims to use in religious practices. But is it truly viable?
Mercy In Light of Zakat
Zakat – herein refers to Zakat on wealth, not Zakat Fitr paid before Eid – is not a charity, or Islamic government’s tax, but a religious obligation. It is a small individual sacrifice out of love by giving away part of what we own to save the needy, and inadvertently the economy.
Zakat’s importance is at par with Salat for both are part of five Islamic pillars and both are mentioned side by side in the Quran. All the different pillars in the Deen (Distinction of Islam, Iman and Ikhsan) are the elemental features in Islamic community or nation, whose day-to-day event is the spiritual and intellectual journey in becoming one in multiplicity through practice, trust and love.
Each pillars of the Deen serves a specific task, and Zakat being one of the pillars, concerns the quality of socio-economy of the community above. Without Zakat as a ritual obligation, the community or nation shall lose its economic strength while the good relationship (love) between its people shall die, which would result in the emergence of evil including oppression, capitalisation, corruption, discrimination, poverty, robbery, bankruptcy, inflation, riot, coup, and the list goes on.
Muslim leaders who wish to experience peace and harmony within their nation should put Zakat into practice, strictly and transparently. Where it really makes a difference is in terms of socio-economy where relations among citizens can and will improve. The poor will then have more buying power, which would increase the local demand and supply and improve liquidity, and defend the nation against bankruptcy and inflation.
Furthermore, the national economy will grow at a steadier pace instead of accelerating rapidly leaving the weak behind, since Zakat prevents citizens from falling into consumerism, or in other words, over-spending, over-consuming and over-weight. In short, the wisdom of Zakat is in its power to stabilise a given society and its economy.
Mechanics of Zakat
While many Muslim nations have their own Zakat system, the concern of some Muslim intellects today is the actual material used in paying the Zakat. In many hadith sahih, The Messenger of Allah (peace be upon him) stated that Zakat must be paid in gold and silver. Which would mean the excess gold and silver within a community or a nation shall be in the hands of the poor.
Since gold Dinar and silver dirhams were abolished for reasons only known to Allah SWT, we are left today with paper money which is supposed to be backed by a certain intrinsic value of gold or silver behind it. Unfortunately however, the paper money (along with the entire global economy) has been forced to be valued against the US Dollar and its war business.
One of the effects of this is the resulting surplus of food, although ironically, people are dying of hunger around the world at the same time. This is not because there are not enough food to go around, but because people do not have the means to buy the foods, since all their money have very little or no value as compared to the US Dollar.
For fear of widespread global hunger and poverty such as above, the advocates of gold Dinar are marching in vehement cries for the immediate use of gold currency so as to engage in a war against the invincible behemoth capitalism along with its orthodox currency system, i.e. the paper money, of which shall not be discussed here leaving the learned men with their war, although their efforts are appreciated nonetheless. Allah knows best.
For us laymen however, ordinary men and women, what we should focus on is to create a socio-economic defense mechanism from inflation, crime and chaos, and that can be done through Zakat, as well as by using gold and silver in our religious practices.
The Light of Gold & Silver
Imagine a scenario where a person wants to pay Zakat in gold but the collector is not willing to accept it, owing to the fact that the Dinar Wakala service, an operator that exchanges paper money to gold and silver coins and vice versa, is uncommon especially in rural areas.
Various reasons can be made and argued, but lets assume the Zakat collector is right in expressing that the Dinar Wakala is still uncommon. Presently, the only dominant global minting authority for gold dinar and silver dirham is World Islamic Mint (WIM). But looking at how Islamic finance authorities and Halal standards regulators have multiplied by the initiative of governments and Sultanate in the past few years, one would expect a similar scenario in Islamic minting industry, that there should be more of this service today.
WIM has indeed put in some noble efforts in helping local communities and governments to set up Dinar Wakalas in certain areas. As of today however, the number is still not as near as there are Halal certification bodies. Muslims unfortunately, will still have to wait for this industry to grow. And for those without the Internet, which would enable the buying of gold and silver coins online, one will just have to wait a little while longer for a Dinar Wakala to be set up within their locality.
If waiting is not an option, one can even start his or her own local Dinar Wakalas. Application to set up a Dinar Wakala operation can be made to WIM or one of its appointed minters(more information at www.islamicmint.com). In Indonesia for example, there are Islamic Mint Nusantara (IMN) and Wakala Induk Nunsantara (WIN) which gave birth to many other smaller Dinar Wakala operators.
If one has sufficient capital, the Dinar Wakala can be operated alone. Establishing it under a community as a cooperative enterprise (Co-op) is even better, either within a minority Muslim community or even within a village or a common residential area.
Unlike the corporation business model where shareholder’s aim is to maximise profit at all cost, co-op is a community-oriented business model where its members are the actual shareholders who create and use its products and services humanely. They would finance, strategise and operate the business or service for their own mutual benefit. By working together, they can reach an objective that would simply be unattainable if they were to act alone.
Due to its nature of business, Dinar Wakala Co-op does not need a lot of space to operate. If allowed by the local municipal law, and since start-up capital is limited, the local mosque or private residential premises may be used as temporary Dinar Wakala Co-op operation centres. Dinar Wakala Co-op, if not the best, is practical for small community to start distributing and using gold and silver in religious practice such as for Zakat payment.
Light Upon Light
In expanding the function of Dinar Wakala, besides Zakat, we can apply the usage of gold and silver to other Islamic religious practices such as the Muamalat or financial transactions, which deals with Islamic business and trade.
In assisting gold and silver usage within Muamalat, the Dinar Wakala shall provide safekeeping services for its members and customers. The safekeeping account may be divided into two categories – the User Account and the Receiver Account. The User Account is for people who use the gold and silver as payment, while the Receiver Account is for entities receiving the payment (Refer Figure 2).
For the purposes of Muamalat, Receiver Accounts are to be offered not only to Zakat collectors, but also to commercial industry, be it food, retail or automobile. Banks could also be included if local regulations allow. It could be better if the law allowed banks to operate as Dinar Wakala to cater to the city and town folks. For small Muslim communities in rural areas around the world (where banks are rare), Co-op is a practical enough solution.
In Figure 2, Dinar Wakala Co-op, with the aid of WIM and e-Dinar, may offer Debit Card for User Account holders, and distribute Dinar Card Swipe machines to the Receiver Account holders (religious body and commercial industry), thus easing out the transaction process for the mass usage of gold and silver currency in commercial sector.
The system would operate as such: Tesco for example, maintains a Receiver Account. When a Muslim consumer shops at Tesco, he will use his Dinar Debit Card, which is then swiped on a Dinar Card Swipe machine at the checkout counter. The actual gold and silver are then transferred into Tesco’s Receiver Account at a nearby Dinar Wakala Co-op, thus enabling it to have in its possession solid gold and silver assets, multiplying on a daily basis.
With the use of Dinar Debit Card, a situation could develop over time, where there could be unhealthy competition among Dinar Wakalas in hunting for commercial accounts. WIM therefore, as a global Islamic minting authority, in partnership with local Muslim authorities, should devise a strict law to avoid this possible scenario in the future.
The safekeeping account model in Figure 2 can be improvised when the need arises to include other industries (e.g. pharmaceuticals, logistic, agriculture, oil and gas, etc) to practice Muamalat properly and transparently amongst themselves. This service should also be offered to non-Muslims as well since it is suitable and beneficial for all, as a defense against economic crisis.
With the mass usage of gold and silver currency in practice within Muamalat, commercial companies such as Tesco, Walmart, or even Citibank will have solid non-depletive savings in gold and silver, stored in their Dinar Wakala Co-op accounts, multiplying on a daily basis.
Along with this new economic culture, gold and silver currencies will be soon seen as ordinary, just as a way of good life in another socio-economic model, where companies large or small, can stay afloat even during the worse of economic crises. They will no longer be a victim of depleting value of the US Dollar, which will eventually bring down all of the world’s currencies and global economy along with it into the path of darkness.
Clearly, the choice between good and evil is in the hand of our leaders.
Side story: The Problem with Consumerism
With regards to the consumption culture of modern society, the problem with food today is they are produced quickly and in large quantities, using very cheap raw materials.
Nature is forced to grow faster innumerably through inhumane applied science, with an increased use of chemicals (preservatives, artificial/fake coloring and flavoring etc.) as the public demand more and more food for the sake of satisfying hunger and not for health.
If humans were to consume less (demand less), farmers shall have more time to produce a higher quality product at lower prices (steady demand at steady pace – no rush), which would encourage manufacturers to produce higher quality products at more affordable prices.
A sound farm-to-fork economy can be created through Zakat, along with an intelligent consuming culture that encourages a moderate consumption of whatever the Creator has supplied to us (natural resources, products, even monthly income).
With the extra saved, the excess can then be shared with the poor, giving them an opportunity to taste and savor what had been endowed by The Almighty. This is, in its truest sense, love.