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e-dinar offers alternative monetary exchange system

THE EDGE DAILY 16/04/2002

 

By Sidek Kamiso, 10.03am

The 1997 financial crisis has exposed many weaknesses in the currency exchange regime, but in the absence of a viable alternative little has changed in the way international trade is conducted.

Labuan-based e-dinar Ltd believes it may have the solution that will rid international trade of volatile currency fluctuations. It is called e-dinar, a fully electronic or virtual monetary exchange system that uses gold instead of notes as currency.

In the exchange system, each currency unit is fully backed by a precise gold value, explains e-dinar consultant Rizal Rahman in a recent interview with theedgedaily.com.

"Although the primary function of the system is to render payment in gold from one customer account to another, the e-dinar has the potential to fully evolve into an internationally accepted exchange mechanism for trade," says Rizal.

The key aim of e-dinar, he says, is to provide a stable currency free from interest and speculation. "We are not competing against other established currencies. Our role is to complement the existing monetary system and provide an alternative, interest-free exchange system that can be operational worldwide."

The system works by translating the monetary value of the account holders' deposits into gold. The stored gold value could then be converted into the currencies of their choice or transferred to another e-dinar account as payment.

Alternatively, a person with an e-dinar account could convert the gold in his account to physical gold by buying specially minted one-ounce gold and silver coins. While these gold and silver coins are not legal tender, they have an intrinsic value and are convertible into cash, says Rizal.

"Since gold is universal, its value is known everywhere," he says, noting that despite the availability of e-dinar gold coins few people will want to carry so much gold with them.

Although the original concept of the system was mooted more than 20 years ago, e-dinar did not have much success until the Internet boom, which has made it easier for gold to be transacted online. Its accountholders now number over half a million and contribute more than 60,000 troy ounces of gold reserves. All transactions are handled by the company's secure website.

Rizal says although many people had been concerned about security, most who have used the system agree that it is the most transparent and efficient mode of transferring money. "We have even published the amount of our gold reserves in real time, so there is no question about transparency," he asserts.

He says the gold reserves are kept in Dubai by a reputable company Transguard and managed by a special purpose trustee.

Currently, no fees are applicable to open an account but account holders are charged storage fees, which is a fraction of the fee charged by banks for similar gold storage services.

In term of safety, Rizal says e-dinar technology ensures that transactions are secure yet hassle-free. "We have the technology to protect account holders' interest, and our website is secure and able to handle most Internet transactions with ease."

In fact, he says the current concept of virtual money could - in future - be converted into other virtual transactions including using mobile devices to manage one's account.

 

Last Updated: 07/06/03 ©NE2002

 

Gold Dinar Research Group