On 13 November the Islamic State announced it will introduce its own currency. With this step it wants to establish it as a sovereign state and to fight the Western monetary system that dominates in the world and that “enslaved Muslims”.
The Treasury Ministry of the IS thus decided to print 3 different coins: one made of copper, one of silver and one of gold. Each coin will represent the weight of the metal it will be made of. Currently the people living under the Islamic State are using the Iraqi Dinar, the Syrian Pound or the US-Dollar. Financial Times estimates the different values of the new currency: the gold coin would have the value of 694 US-$, the silver coin would vary between 45 cents to 4.50 US-$ and the copper coin would be around 7 cents.
Yet the announcement leaves several questions accompanying such a step unanswered: where will the metals come from? Where will the coins be minted? And above all – what gives people the safety to trust in the stability and value of this currency? Due to a lack of a sophisticated program Foreign Policy writes that the currency will fail.
Gold, silver and copper must be confiscated “through theft and spoils of war”, as Steven H. Hanke from the Johns Hopkins University told the Financial Times. Since the Islamic State hasn’t answered where the currency will be minted, it leaves the people who should use it with only little trust in it. Further will it only be recognized in the Islamic State’s territory, which is always changing and never stable – the international community won’t acknowledge the currency. For a currency to work and being accepted by the people that are using it, the people need to trust in it. It seems as this will be hard, if not even impossible, for the Islamic State to achieve.