In the beginning the Muslims used gold and silver
by weight and the dinar and dirhams that they used were made by the
Persians.
The first dated coins that can be assigned to the Muslims are copies
of silver dirhams of the Sassanian Yezdigird III, struck during the
Khalifate of Uthman, radiy'allahu anhu. These coins differ from the
original ones in that an Arabic inscription is found in the obverse
margins, normally reading "in the Name of Allah". Since then the writing
in Arabic of the Name of Allah and parts of Qur'an on the coins became
a custom in all mintings made by Muslims.
Under what was known as the coin standard of the Khalif Umar Ibn al-Khattab,
the weight of 10 dirhams was equivalent to 7 dinars (mithqals)
In the year 75 (695 CE) the Khalifah Abdalmalik ordered Al-Hajjaj to
mint the first dirhams, thus he established officially the standard
of Umar Ibn al-Khattab. In the next year he ordered the dirhams to be
minted in all the regions of the Dar al-Islam. He ordered that the coins
be stamped with the sentence: "Allah is Unique, Allah is Eternal". He
ordered the removal of human figures and animals from the coins and
that they be replaced with letters.
This command was then carried on throughout all the history of Islam.
The dinar and the dirham were both round, and the writing was stamped
in concentric circles. Typically on one side it was written the "tahlil"
and the "tahmid", that is, "la ilaha ill'Allah" and "alhamdulillah";
and on the other side was written the name of the Amir and the date.
Later on it became common to introduce the blessings on the Prophet,
salla'llahu alayhi wa sallam, and sometimes, ayats of the Qur'an.
Gold and silver coins remained official currency until the fall of
the Khalifate. Since then, dozens of different paper currencies were
made in each of the new postcolonial national states created from the
dismemberment of Dar al-Islam.
Allah says in the Qur'an:
And amongst the People of the Book there are those who, if you were
to entrust them with a treasure (qintar), he would return it to you.
And amongst them is he who, if you were to entrust him with a dinar
would not return it to you, unless you kept standing over him. Qur'an
(3,75)
Qadi Abu Bakr Ibn al-Arabi, the greatest authority on Qur'anic Law
wrote in his famous "Ahkam al-Qur'an" about this ayat:
"The benefit that can be taken from this is the prohibition of entrusting
the People of the Book with goods".
Qadi Abu Bakr said: "The question concerning entrusting property is
legislated by the text of Qur'an." This means that the ayat is a legal
judgement of absolute validity and of the greatest importance to the
deen.
Entrusting wealth to non-Muslims is not allowed, but furthermore, taking
a non-Muslim as a partner outside Dar al-Islam (where we stand over
them) is extremely restricted, because they might cheat or might use
our wealth in forbidden transactions.
Since paper-money is a promise of payment, can it be permitted to trust
the issuers while they hold the payment (our property) outside our jurisdiction?
History has also demonstrated repeatedly that paper money has been a
permanent instrument of default and cheating the Muslims. In addition,
Islamic Law does not permit the use of a promise of payment as a medium
of exchange.
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THE GOLD DINAR RESEARCH GROUP 