FINANCE - Murat Cizakca (Inceif-Malaysia) - Islamic Countries Should Continue To Use Paper Currency

KUALA LUMPUR, Monday 17 January 2011 (Bernama) -- Islamic countries should continue to use paper currency instead of gold dinar as history has shown that the return to the coinage system could increase interest rates and inflation would be difficult to control.

Professor of Comparative Economic History at International Centre for Education in Islamic Finance (INCEIF), Dr Murat Cizakca, said money should serve as a medium of exchange, not as a commodity.

"We need to continue with paper currency, and the central banks controlling paper currency should have full autonomy," he said.

BANKING - The Gold Dinar is Gaining Ground

Harsh criticisms of Islam and Muslims are becoming increasingly common in Western media, but one area they continue to command respect is in the financial sector, especially among Austrian economists.

In the wake of a mortgage melt down, a recession and unprecedented national debt many economists observed that Islamic finance, specifically its prohibition on interest, has shielded many American Muslims from economic crisis.

Now, a state in Malaysia is taking it one step further, by issuing an Islamic currency which they believe will protect consumers from the usury of inflation and market manipulation inherent to a debt based paper currency.