Often the call to return to gold based currencies is considered to be not “modern” or “old fashioned” - how do Sunnah Currency respond to such arguments?
Answer: Around the time of Napoleon Bonaparte who created the ‘Banque de France’ and through it, inspired the rest fiat/paper currency that’s ubiquitous throughout our commerce today, people considered gold and silver coins (dinar & dirham) as the only trusted means of exchange. You might call this ‘old fashioned’, We prefer to call it ‘common sense’. While fiat currencies are great for governments and banks because they allow money to be created from virtually ‘thin air’ and to collect interest on basically nothing, gold and silver currencies are the antithesis to fiat/crypto currencies precisely for the fact that they cannot be created from ‘thin air’ and do not carry interest/riba. Contrary to fiat currencies, bi-metallic currencies have an intrinsic value which is derived from their rarity as a precious metal coupled with the arduous labour it takes to extract them from out of the earth, purify them and then mint them into coins. This intrinsic value does not depend on a promissory note by somebody else to pay the value of as is the case with fiat or crypto currencies.
The funny thing is that so many people still trust banks even though we are facing a looming an impending financial crisis at the hands of a increasingly inflationary dollar and its inevitable collapse very soon - is it high time now for a Sunnah alternative?
Answer: In our opinion, one of the ‘good things’ that came out of the 2008 financial crisis is a growing perception/sentiment that banks cannot be trusted, in part due to the fact that they were at the crux of the financial crisis in 2008, caused by greed and reckless trading activities (often for their own benefit and not the benefit of their customers) and their excessive risk appetite through the use of complex ‘structured’ investment products/vehicles mixing bad with good credit. Not only did many people lose a lot of money through such banks, but also we burdened and placed the onus on future generations to pay these bad debts off for the bank’s recklessness through the unpopular government ‘bailouts’. As a result, many have lost their trust in banks and are increasingly willing to explore alternatives such as keeping precious metals in safety deposit boxes at home where they can touch and feel their life's savings or by investing in companies holding precious metals as physical collateral.
To be continued in’Shaa’Allah
Ihyaa – us -Sunnah | Revival of Sunnah