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Archive for February, 2011

Bismillah irrahman irrahim

Sidi Muhammad Fadli asked me:
Dear Umar. Assalamualaikum w.b.t.

There is an argument about what is the valid specification of a dinar. Some said must use 24K, and some said 22K. Even there is a fatwa from Indonesia that claim the only valid standard is to use 24K gold. However, I found that the document that support the fatwa is highly support one-side point of view.

I will gladly to hear your opinion regarding this issue. Thank you. jazakallahu khairan jaza.

 

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Dear Sidi Muhammad Fadli,

 

Wa alaikum salam wa rahmatullah.

 

Allah is the Light the Heavens and the Earth. He is the source of all wisdom. And Muhammad, sallalahu alayhi wa salaam, is His Messenger sent to us as a Mercy to mankind.

 

There is now 19 years since we started to mint the first Dinars in Granada (Al-Andalus). I have looked at this matter of the purity many times during these 19 years. I have personally consulted scholars and metallurgists and made several tries with 24k coins and tested them. My research was every time equally conclusive: ‘we cannot use 24k coins’.
Let me take you through the argument.

 

There are two matters to be considered: one is the ‘amal and another is the practicality (durability) of the coins. In the ‘amal we are in search of what was the original way of making the coins. The issue of durability is not obvious at first only when you use the coins it becomes of critical importance. Here is the issue: 22k coins have a average life span of 15 years, but 24k coins have a durability of just 3. This means that every 3 years we have to recall these coins. This is not only costly and impractical, but renders the whole idea of making coins nearly useless.

 

1. ‘AMAL

 

24k technology did not exist on the early days of Islam. The modern 999.9 was not discovered until the 1874 by Emil Wohlwill, the Wohlwill process. So, when we speak about pure gold as we understand it today, we have to realize that is something new and different to what was called pure gold in the early days. The most common metallurgic process at Roman Times to purify noble metals consisted on treating the ore at high temperatures under a carefully controlled operation in order to separate gold and silver from base metals that might be present in the ore. The noble metals do not easily oxidize while the base metals do. The problem was to separate gold from silver. They used techniques such as ‘salt cementation’ to further separate gold from silver with different degrees of success depending on the mint. Therefore the quality of the coin depended on two major factors: the quality of the original ore and their own technical capabilities. The original Dinars that have been found through archaeological work are between 20k to 23k.

 

This is most likely to be the processes that were used at the time of the first Dinars and Dirhams minted by the Khalif Abdalmalik and throughout the entire Umayyad Period. There is no doubt that their INTENTION was to create a ‘pure gold’ coin but they COULD NOT as we understand it today. Ironically their unintentional impurities gave the coins durability. This leads to our second issue.

 

2. DURABILITY

 

24k is so soft that you can bend a dinar into a fusilli (pasta) with the pressure of your hands. If it falls to a solid floor it will dent badly. If you keep it in your pocket with other (harder) coins for a period of time it will erase the features, markings, edges, etc. All these will happen with a consequent loss of weight. What is the amount of weight loss a coin can bear before is no longer a dinar (weight)? WIM says 1%, that is, when the weight of a dinar falls below 4.20gr is no longer a dinar. At that point, according to WIM, that coin must be recalled and re-minted. This is the responsible thing to do.

 

A bit of metallurgic knowledge. When you add 10% silver to a 24k gold coin you double its strength. When you add 10% copper you increase its strength 20 times. A mixture of 50/50 of silver and copper in a 917 coin gives the coin more than 5 times its original strength.

 

MY JUDGMENT

 

24k coins did not exist in Madina. 24k coins are good to be placed in a vault or a safe deposit box, but not for circulation. A responsible mint is not only responsible for selling coins and ‘that’s it’, but it MUST TAKE responsibility over the life span of the coin. 24k is easier to mint than 22k, so it is normal than some irresponsible people will take advantage of this and do marketing of their 24K coins pretending they have a “better” coin.
24k coins are not better coins, ACTUALLY they are worse coins. In the fiqh of Imam Malik we hear about ‘unpopular coins’ (makruha). Makruha means ‘that people did not want’. This is not a statement on purity, but a statement on acceptance by the people. People choose according to what they find more reliable.

 

“Malik said that it was not good when counterpoising to give good old coins and put along with them unminted gold in exchange for worn Kuffic gold*, which were unpopular (‘makruha’ which people do not like), and to then treat the exchange as like for like.”

 

*The kufias (gold of Kufa) were broken or worn coins with less weight than what they supposed to be and they were unpopular.

 

What is important about this is that Imam Malik in accepting that there cannot be ‘like for like’ considers that non popular coins are no longer ‘standard’ dinar. This is critical to understand our argument.

 

Some people think the answer to this problem of durability and acceptance is to make a coin with adequate gold weight (4.25 gr or mithqal) and then add some strengthening material, therefore the coin will weigh 4.5 or something similar. This is not possible. A Dinar is a measure of weight equal to 1 mithqal. You cannot increase the weight of the dinar to keep the 4.25gr of 24k gold. This will be wrong. The weight cannot be altered.
There is no opinion until here.

 

Now, my personal ijtihad and therefore MY OPINION on this matter is:

 

‘to make the Dinar of gold material as pure as possible while it can guarantee its function as a medium of exchange. And Allah knows best. ‘

 

MY OPINION is that we should have one single standard with the highest degree of security that we can afford bearing in mind the danger of MODERN COUNTERFEITING.

 

Counterfeiting is a big problem for a coin: reduces the value of real coins; increases prices artificially (inflation) due to more money getting circulated in the economy – an unauthorized artificial increase in the money supply; and decreases the acceptability (satisfactoriness) of money amongst the people.

 

In order to improve the acceptance of a coin anti-counterfeiting measures have to be taken involving increasing the fine detail in the minting (increasing the quality of the coin) and milled or reeded (marked with parallel grooves) edges are used to show that none of the valuable metal has been scraped off. This detects the shaving or clipping (paring off) of the rim of the coin. However, it does not detect sweating, or shaking coins in a bag and collecting the resulting dust. To prevent sweating the coins only increasing their strength can help. There are other problems.

 

Counterfeiting coins is now a sophisticated art. Counterfeiters have at their disposal alloys than can pass density test undetected. The only way to prevent them is to increase your anti-counterfeiting measures. And needless to say, these measures have to be taken at the beginning of the minting and not later when the fake coins go undetected in circulation. A mint that does not take this into account is irresponsible.

 

There are many modern anti-counterfeiting measures that can help to give people reliance on their coins. To put it shortly they are divided in two types: visible and non-visible. Visible anti-counterfeiting measures are then ones that matter to us because the non-visible require equipment to be detected and that will not be available for most users. We have studied the best of them. WIM is implementing them as we speak.

 

Introducing security features in the coins changes the way in which we mint. First, it requires a singular standard. It is not logical to ask the traders and consumers to become aware of 20 different kind of dinars. Since the solutions may differ we need a single authority that serves most of the mints. Some people, for example, may argue that the best coin would be an even harder coin made of copper and gold (without silver) and with a 20k purity. Others will say: 21k, 22k, 23k, etc. Only a single standard will allow us to achieve maximum and global functionality of the coin and will help us to prevent modern forgeries. That is why we have WIM.

 

WIM chose 22k. It should be noticed that 99% of the coins ever minted in the world TO BE USED AS MONEY were 22k, even when the technology was available to make 24k (which is cheaper to manufacture). The reason? 24k coins do not last and 22k offers a good balance between purity and strength with a relative low-tech solution.

 

Nevertheless, it is my opinion that no one is wrong in minting a 24k coin (or 23k for that matter) IF they understand what they are doing. But if they do not, they are irresponsible. IN FACT, I will argue that the ideal solution would be to get a 24k coin with the strength of a 22k. If this is ever technically available at a reasonable cost I would think this is the ideal coin. WIM is looking into this. In the meanwhile with our limited knowledge we have resorted to a 917 gold coin with a mix of silver and copper in order to make the coin strong enough to function as money. And Allah knows best.

 

As for the people who have written the fatwa in Indonesia we know who they are. They are led by a man whom we knew very well, Mr Firman from Jakarta, and he is utterly lost. Of their fatwa I only know their conclusions in terms of weight (4.5) and purity (24k) and a little bit of their methodology that has transpired by talking to them. I disagree with regard to “their” weight since we have the uncontroversial fact of authentic well preserved original Umayyad Dinars which clearly establish the commonly accepted 4.25gr. Apparently, now they argue that they ‘cannot accept the standard coins of the Umayyads’ but I find no justification for that. I also disagree with them in respect to their “purity” since it does not solve the critical question of the durability. They also argued that ‘durability is not a matter concerning Islamic Law and therefore taking that into consideration is a “secular” concern’. They are wrong again because public interest (masalah al-mursalah) is a fundamental pillar of our fiqh. Masalah al-mursalah determines that when you have a choice on those matters that because they are new they have not been upheld or nullified by the Shariah, you should choose the one which is better for the people. In answer to them, I would argue that 24k technology is something new and that not taking into consideration the practical issues of 24k coins in circulation (and thus the public interest) is not part of Islamic Law.

 

 

For all those reasons, in my view, that Fatwa of Firman and friends is wrong. But if they insist they should carry on minting their own coins while we remind the people of Indonesia of the issues at hand. That will be enough.

 

 

Allah guides whom He wishes. He demands taqwa from us and we should have it at all times present.  Fearing Him is our part of the deal which shall prevent us from being blind by confusing pride. In search of Guidance we must get closer to Him until there is nothing left of us. Surrendering our will to Him is the way to see. This is the path of success. We care of Him, He will care of us, …and our coins. We ask Allah to be included among those people of taqwa. Amin.

 

Umar Vadillo

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