Banking: Malaysia's Kelantan state introduced alternative currency
Kelantan, a state under the control of Islamic political party PAS, has introduced what its senior minister Datuk Nik Abdul Aziz Nik Mat says is a shariah (syariah) compliant currency.
The gold dinar and silver dirham currency is circulated as coins. Datuk Nik says that, so far, 1,000 traders have signed up to use the currency as have Tabung Haji (the charity that sponsors pilgrims to attend the Haj and Bank Islam.
However, the coins have a legal status only as tokens and are not directly convertible. Former prime minister Mahathir had tried to encourage the introduction of the shariah dirham as a common currency across Islamic nations. However, his grand idea proved too challenging a concept for those countries he tried to interest, in particular the richer nations of the middle east.
The coins, certified by the Government of Kelantan and not bearing the name of Malaysia on their face, are unlikely to become a currency of choice but rather, depending on their purity, collectors items in the style of the Krugerand.
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