Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

Gold Seeker Closing Report: Gold and Silver Gain with Stocks
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 15 2018
By: Ira Epstein

Will The Fed Sacrifice Retirement Portfolio Values For The "Common Good"?
By: Daniel R. Amerman, CFA

Here's How We Discovered This Disruptive Gold Stock... Before It Went Public
By: Frank Holmes

GoldSeek Radio Nugget: Rob Kirby and Chris Waltzek

Silver: Supported by D.C. and The Deep State
By: Gary Christenson

Blue Sky Uranium Reports over 1% U3O8 and 0.1% V205 in Pit Sampling Adjacent to Ivana Uranium-Vanadium Deposit
By: Blue Sky Uranium Corp.

Gold Oil and Commodities …Back to the Future?
By: Rambus

Investors And Analysts Know Nothing About Gold
By: Avi Gilburt

The New China and Gold
By: Arkadiusz Sieron


GoldSeek Web

Using gold as money

 -- Published: Tuesday, 24 January 2017 | Print  | Disqus 

By Alasdair Macleod

Goldmoney’s Personal, Business, and Wealth products are among the first to achieve recognition as compliant with the new Shariah gold standard,...

...established by the Accounting and Auditing Organisation for Islamic Financial Institutions, AAOIFI, in conjunction with the World Gold Council has developed the Shariah standard on gold, which can be expected to broaden the use of gold in the Muslim world. Goldmoney’s platform allows individual people to use gold as money and as a store of value extremely efficiently.

I have personally been involved with this initiative from the outset, and my own motivation has been two-fold. The obvious one is extending the reach of Goldmoney’s products into a market of 1.7 billion people; less obvious, perhaps, is my personal desire to permit ordinary people to protect themselves from the wealth-transfer effect of monetary devaluation. Therefore, I want to ensure that all people have access to gold as a payments and savings medium, so I regard Goldmoney’s compliance with the new Islamic gold standard as a major step forward.

Gold is one of six ribawi items (the others being silver, salt, wheat, dates and barley), which are the staples of life. Strict rules are applied to ribawi to ensure injustice and inequality between transacting parties are prevented. Therefore, throughout Islamic history, gold has had a special significance as both a commodity and money. Logically, there is an understanding that gold is different from government-issued currency. And, therefore, the lawful possession of your own money, such as through a Goldmoney account or Holding, is different to being a creditor of a bank.

For all savers, there is a lack of clarity over the ownership of bank deposits, not only in Muslim’s minds. We cannot know for sure to what extent suspicion of banks and their money deters Muslims from opening bank accounts, but it would be wrong to dismiss it entirely. It would also deny a good reason behind the success of Islamic banking.

Besides the question over bank deposits, there is a practical problem concerning government currencies, many of which lose purchasing power at a faster rate than the dollar. The chart below illustrates this loss for currencies in some major Islamic countries, together with the dollar for comparison, all relative to gold, since 1969, the year before the dollar went off the gold standard.

1969 2014 US dollar vs Turkish lira vs Indonisian rupiah Thai baht

Note that the price scale in the chart is logarithmic, meaning these losses over time are far higher than first appears. Muslims in these countries have suffered greater currency depreciation, measured against gold, than measured in US dollars, and the US dollar has lost nearly 97%. In short, ordinary people have had a very raw deal by keeping their savings in government currency.

We can assume that this history is a powerful disincentive for them to do so, and is a good reason for them to use gold instead, particularly for capital activities. Networks of pawn shops exist for this purpose in countries like Indonesia, enabling people to mobilise their savings. Indeed, without gold it is virtually impossible for the poor to accumulate the savings necessary to pay for capital items, such as the Hajj, the pilgrimage to Mecca every Muslim is expected to make at least once.

The end of cash

There is little doubt that governments in these nations wish to encourage the unbanked to open bank accounts, and to do away with physical cash entirely. Muslim nations have become two-stream states, with modern cities at one extreme and a cash-based economy at the other. Much economic activity goes unrecorded, and merely bringing it into official GDP statistics is expected to boost economic growth by as much as 20% or more. Doing away with cash simply allows central banks to contain the fall-out from banking crises, and is an objective shared with central banks every were. Furthermore, these moves are expected to increase the amount of tax collected.

In all this, there is likely to be a constructive role for a Shariah-compliant gold payments and savings facility, helping people adjust to the inevitable pressures from governments to replace cash with banking and mobile-based financial technology.

Time will tell. People must also be persuaded that gold stored and insured in secure vaults is at least as good, if not better, than keeping it at home. But the granting of a fatwa for Goldmoney’s platform is an important development for devout Muslims. It is the Western equivalent of facilitating an ethical payment and saving facility for everyday use.

The views and opinions expressed in this article are those of the author(s) and do not reflect those of Goldmoney, unless expressly stated. The article is for general information purposes only and does not constitute either Goldmoney or the author(s) providing you with legal, financial, tax, investment, or accounting advice. You should not act or rely on any information contained in the article without first seeking independent professional advice. Care has been taken to ensure that the information in the article is reliable; however, Goldmoney does not represent that it is accurate, complete, up-to-date and/or to be taken as an indication of future results and it should not be relied upon as such. Goldmoney will not be held responsible for any claim, loss, damage, or inconvenience caused as a result of any information or opinion contained in this article and any action taken as a result of the opinions and information contained in this article is at your own risk.


| Digg This Article
 -- Published: Tuesday, 24 January 2017 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2018 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of, its affiliates or advertisers. makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, is strictly prohibited. In no event shall or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.