The Islamic State has launched it own currency to separate its self-declared territory from the “tyrannical financial system imposed on Muslims”, the Financial Times reported, citing a statement from the jihadist group.
Abu Bilal al-Homsi, the nom de guerre of a Syrian activist who serves as a liaison to Islamist group, confirmed the veracity of the document announcing its launch.
“This is a strike against the Crusader coalition, and it’s a victory that the Islamic State has an economy and is self-sufficient,” he said.
The newspaper noted that the self-declared state has no functioning ministries nor is it recognized by any government in the world. It also said the militant group is under sustained air attack from the United States and its allies.
While seeking to distance itself from the international economy, the new currency may make the group’s economy even more dependent on global fluctuations, particularly of precious metal and commodity prices, FT said.
The highest-denominated 5 dinar coin, for example, will contain 21.25 grams of 21 carat gold, worth about US$694, while the lowest-denominated 10 flous coin would contain 10 grams of copper and be worth about 7 US cents. The proposed silver dirham coins would range in value from 45 US cents to US$4.50 at current rates.
“The purchasing power of the money they’re emitting will be wholly dependent on what the purchasing power of gold, silver and copper are,” Steven Hanke, professor of applied economics at Johns Hopkins University, told the newspaper.
“The important thing is: where are they going to get the gold and copper? [Islamic State] will have to confiscate more property through theft and the spoils of war.”
Although the jihadis would not necessarily need a central bank if the coins were made of gold and silver, the statement described how the currency’s introduction would be overseen by a leadership council in the “house of finance” and approved by their leader Abu Bakr al-Baghdadi, the report said.
In an apparent bid to quash rumors that their leader had been killed in recent air strikes, the IS also released on Wednesday a 17-minute audio recording purportedly of Al-Baghdadi.
The currency’s launch prompted Karl Sharro, a UK-based Lebanese comedian and architect, to tweet: “Along with its new currency, IS today revealed its new postal service.”
The post carries an illustration of a pigeon clutching a letter in its beak, the report said.
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