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Towards Stabilization of the World Monetary System: A Shariah Perspective نحو استقرار النظام النقدي العالمي: منظور شرعي

Author

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  • Adam Abdullah

    (Assist. Prof., Institute of Islamic Banking and Finance (IIiBF) International Islamic University Malaysia (IIUM))

Abstract

In essence, the author proposes a supra-national complementary currency that seeks to provide monetary and financial stability. There are some technical issues relating to the demurrage charge which, rather than an interest rate, could be replaced by the zakah rate in order to prevent hoarding and encourage circulation of the TRC. However, the author proposes a trade-reference currency (TRC) which as a money-of-account is defined in terms of a basket of commodities, and thus deemed inflation-free. This paper intends to analyze various monetary reform proposals since it is useful to understand the chronology of proposals that have anticipated this particular concept of a TRC. In fact, it is not without precedent from an Islamic perspective and was anticipated under the Ayyubids by none other than Saladin in 1171 (Abdullah, 2016). The army dinar or dinar jayshi (DJ), was an important money-of-account used to determine the present value of agricultural land for land concessions (iqta) granted by the Sultan for military service, in lieu of a stipend.

Suggested Citation

  • Adam Abdullah, 2017. "Towards Stabilization of the World Monetary System: A Shariah Perspective نحو استقرار النظام النقدي العالمي: منظور شرعي," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 30(2), pages 71-78, July.
    • Handle: RePEc:abd:kauiea:v:30:y:2017:i:2:no:7:p:71-78
    DOI: 10.4197/Islec.30-2.7
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    References listed on IDEAS

    as
    1. Bernard Lietaer, 2017. "A Possibly Sharīʿah-Compatible Global Currency to Stabilize the Monetary System عملة عالمية متوافقة مع الشريعة الإسلامية لتحقيق استقرار النظام النقدي," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 30(2), pages 47-58, July.
    2. Bonpasse, Morrison, 2009. "The single global currency - common cents for the world (2008 Edition)," MPRA Paper 14756, University Library of Munich, Germany.
    3. Paul Davidson, 2002. "Financial Markets, Money and the Real World," Books, Edward Elgar Publishing, number 2467.
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