A Malaysian state introduces Shariah currency, gold and silver coins

A Malaysian state has introduced the gold and silver coins as official currency, reviving a practice from early Islamic era. The Kelantan state of Malaysia has become the first to introduce the gold dinar and silver dirham for use.

The people can use the gold dinar and silver dirham coins at stores and restaurants, a Kelantan state official said on Friday. The coins came into circulation Thursday and can be purchased at various locations in Kelantan. Their worth is currently about $180 per dinar and $4 per dirham.

The gold dinar and silver dirham coins would provide an alternative to Malaysia's currency, the Ringgit, the state official said. The northeastern Kelantan state is governed by the Pan-Malaysian Islamic Party, a conservative opposition group that promotes religious policies in its rule.

Kelantan authorities also say the use of such coins is encouraged in the Quran. The gold dinar was the official currency of Muslim societies for centuries.

The value of the coins used in Kelantan can fluctuate according to market prices, but officials say it remains a better alternative to currency affected by the U.S. dollar and other foreign currency.

State officials have minted coins worth about $630,000 for use, and is made available at more than 1,000 outlets in Kelantan's capital, said Nik Mahani Mohamad, executive director of Kelantan Golden Trade, which mints the coins.

"It's a great, great moment for Muslims," Nik Mahani said. "We are providing an alternative means for the people to trade with."

Mentri Besar Datuk Nik Abdul Aziz Nik Mat said the state would strive to expand the use of gold dinar and silver dirham in its transactions, including the payment of civil servants’ remuneration. He also said about 1,000 traders so far had agreed to use the currency in their transactions besides Tabung Haji and Bank Islam Malaysia.

The state government also plans to give employees the option of receiving part of their salary in this currency, as well as introduce gold bars for large investments. Muslim alms can also be paid with the coins.

The Pan-Malaysian Islamic Party has governed Kelantan since 1990. Some of its policies over the years include banning gambling, nightclubs and rock concerts, and requiring Muslim female state employees to wear headscarves at work.

- Asian Tribune -