Superiority of the Gold Dinar as Currency: Study Based on the History of Islamic Civilization

Malaysia has proposed to reuse gold dinar as an important instrument in the monetary system during the severe currency crisis that has hit the Asean countries in 1997/98. The proposed gold dinar or the return of gold-based monetary system was received by intense debates when the World Bank President, Richard Zoelick, has proposed for an establishment of Bretton Woods II system recently in 2010. The question is how superior the gold dinar is, in the Islamic history that has claimed for its restoration in the global monetary system? And what are evidences of Islamic history linking to its stability and privileges? Thus, this study aims to analyze the privileges and supremacy of gold dinar currency based on the historical data of Islamic civilization from the time of Prophet Muhammad PBUH until the fall of the Ottoman Empire. This is a qualitative study done by the strategy of historical approach. The results show that gold dinar was crowned as the first currency for the Muslims and became a symbol of strength as well as Muslim’s identity during the caliphates empire until the fall of the Ottoman Empire in 1924. The era of gold dinar was called the golden era of currency due to its stability by nature.