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McCrow. History Interrupted, the Art of Disarmament. Hoerle-Guggenheim Gallery

Futurist’s jihad – Part II

Written in


The ISIS’ touch: Digging for Alt-Currencies in the Desert and the Race for eDinar

by Casey Carr

top image: McCrow. History Interrupted, the Art of Disarmament. Hoerle-Guggenheim Gallery [1]

Two recent speculative studies have shed light on possible jihadi use of virtual currencies: the robust 50-page ETH Zürich Center for Security Studies report entitled “Terrorist Use of Virtual Currencies: Containing the Potential Threat” (May 2017)[2], and the more sensationalist Foreign Affairs article “Are Terrorists Using Cryptocurrencies? New Technologies Could Lead to Their Widespread Adoption” (April 2017)[3].  While the former goes in depth into many of the cultural aspects of jihadi finance being coupled with an anonymous virtual currency, building rich conceptual models to understand the threat and showing how the IS has benefited from fiat currency, both reports find evidence lacking regarding current widespread use by jihadis of cryptocurrencies such as Bitcoin. The Foreign Affairs article also seemed to lack in ingenuity by not expanding further on a 2015 national report on terrorist financing risk assessment which made several similar claims already.  The Islamic state (or its supporters) have claimed or explored various avenues for financing, however anonymous hawala practice, combined with war spoils and illicit oil trade, seems to be enough to fulfill a majority of IS needs; lacking a reliable supply of electricity, let alone internet, there is little need to delve into virtual currencies for now.  Despite this, IS released a video in 2015 challenging the current global financial system by trying to reinstate a gold standard.  On the other side of the fence, various rebel groups are also developing independent financial leverage outside of centralized state-operated systems, mostly gaining media attention under the mythic tutelage of libbitcoin and Dark Wallet developer Amir Taaki.  The fallacy of most terrorist finance-oriented articles on the use of virtual currency is only approaching a private, localized criminality, whereas global conspiracy theorists lack the ability to weave together micro-level involvement leading to a critical mass of a macro-level change in the global economic system.  Here I address both and explore whether isolated, stand-alone events affect the broad hegemony of the global financial system, often the target of so much jihadi propaganda.

A Dinar Among Dollars

Now brought to light from Wikileaks’ 2016 release of Hillary Clinton’s emails is confirmation of Western suspicion that Libyan president Muammar Qaddafi intended to challenge the use of the Franc (CFA) across French-speaking Africa by implementing a universal Libyan gold dinar.[4] On 2 April 2011, Libyan sources confirmed that Qaddafi’s government hold of 143 tons of gold, valuing at $7 billion, was removed from Libyan Central Bank vaults in Tripoli and transported to Sabha near the southern border.  This gold was intended to fund a “pan-African currency based on the Libyan golden Dinar” and this move was partly behind French president Nicolas Sarkozy’s decision to invade Libya.[5] By November 2014, the Islamic State announced that it would begin minting its own golden dinar, under the Caliphate’s gold standard during Uthman’s reign in 634C.E.[6]  The Islamic Dinar was made a reality during the summer of 2015, and has been reported circulated between oil traders in the Islamic State, with three primary sources of income for the Islamic State at its helm: oil and gas industry for $500 million in 2015, taxation and extortion reaching $360 million in 2015, and the seizing of $500 million in cash from the Iraqi Central Bank’s vaults in Mosul during the 2014 capture.[7]  Most of the Islamic State’s plan and criticism of the current global economic system is outlined in their 55-minute documentary entitled Return of the Khilafah | Return of the Gold Dinar released in September, 2015.
Challenging the current economic order by restoring the gold standard may not be the only approach by terrorist groups such as ISIS.  Since then, the creation and pursuit of crypto-currencies, originally explored as a venture for online gold-trading in the form of e-gold as early as 1996, adds further possibilities.  Nick Szabo’s Bit Gold[8] provided the foundations for Satoshi’s Bitcoin in 2009.  Interest and utility of cryptocurrencies by terrorist groups was outlined in IS-supporter Taqi’ul-Deen al-Munthir’s[9] ‘Bitcoin wa Sadaqat al-Jihad’ (‘Bitcoin and the Charity of Violent Physical Struggle’) released in July 2014.  This supporter’s essay discusses strategies compatible with shar’ia, for implementing a cryptocurrency system such as Bitcoin to carry out decentralized transactions across darknet markets like Silk Road (or following its shutdown in November 2014, new P2P markets such as OpenBazaar). DeepDotWeb writer Zubair Muadh investigated Taq’ul-Deen’s claim of whether IS was using Bitcoin or not,[10] exposing the relatively unknown facts behind the actual premise of the essay, and whether it is a reality of the Middle East region. Through email exchange with the author, Zubair confirmed that Taq’ul-Deen is only a supporter and that IS does not currently accept Bitcoin donations, although this is not entirely what the author had implied.  Taq’ul-Deen suggests that IS should implement their own cryptocurrency, rather than using the established Bitcoin, with the appropriate name eDinar, as Bitcoin is too limited in the region and might draw too much attention to cryptocurrency usage.  He stated in the email:

eDinars would be created at the same rate the Islamic State issues physical dinars, or prints money. As opposed to mining. It would be directly, intrinsically, linked to a fiat Islamic State currency which would be made of precious metal and backed by gold.

The Islamic state and Libya aren’t the only ones repurposing gold and pushing for a new gold standard: much of the world’s gold is at the moment being repatriated following the 2008 financial crisis, culminating in the world’s central banks becoming net buyers rather than net sellers by 2010.[11]  Germany recently repatriated 674 tons of gold from abroad, including 111 tons in New York and, much sooner than anticipated, by the end of 2016, although it was originally scheduled to finish by 2020.[12]  Germany’s gold stores were dispersed during the threat of Communist invasion, the early 50s and 60s where Germany acquired most of its reserves.

gold coins[13]


The Gold, the Baad, and the Oily

Reports from the region have confirmed that IS had minted its own gold-based currency, regardless of whether it is in wide distribution or not, and instructed oil traders in Deir el-Zor to conduct their business in the gold dinar, with one dinar equivalent to roughly 190 USD.[14]  Another report examined the financial threat this could mean for terrorism investigators and bankers, where gold is very easy to launder.[15] The original video Return of the Gold Dinar outlines many justifications for the reintroduction of the gold standard, citing the World Trade Organisation and U.S. Federal Reserve system as instigators of a corrupt and unjust global economy.  The video traces the entire history of monetary value and currency from ancient civilisations to the creation of medieval banking with the introduction of credit and banknotes.  It states the corruption began with fiat currency put in place by the Germans during WWII and then taken up under the Bretton Woods agreement by the U.S.-backed global economy by 1971, backing currency in GDP or in essence, petroleum paid only in USD.  IS claims that the credit system demanding interest and steering away from the gold standard is un-Islamic, and haram.  But can such a hybrid-state terrorist group challenge the world order by propaganda and gold alone?
This is not likely a major threat, however laundering is still the biggest issue with the circulation of gold among IS members.  With cryptocurrency, this becomes infinitely more obscure (although Bitcoin is not completely anonymous).  What the Islamic State dinar, and eDinar, does significantly challenge is other dinar currencies in place, most specifically the Iraqi dinar, by creating illegitimate Ponzi schemes and scams that erode legitimacy of the local currencies already in place.  The Foreign Affairs article has clearly challenged any notion of current use and capabilities of terrorist groups to take advantage of cryptocurrencies, but with the more robust anonymity of Zcash and Monero, such use of cryptocurrencies is not far off with the widespread reach of IS networks and Hezbollah.[16]
Lifting more stones, a significant change to the Iraqi dinar and IS’ operational tempo occurred by November 2015 – seemingly a correlation. 13 November 2015, IS pulled off one of its largest terrorist attacks on European soil in the highly-coordinated Paris attacks.  By 15 November, it was discovered that IS’ media wing Al-Hayat Media Center moved its content hub to the darknet[17] which is where the follow-up propaganda video came from in the aftermath of the attacks (with pseudo-encrypted content in the introduction).  By the end of that October, the Iraqi dinar, already slumping since September 2015 (in correspondence to the release of the IS video Return of the Khilafah | Return of the Gold Dinar?), had taken a crash to nearly 1000 IQD to the dollar.  It was reported by al-Sabah on 17 November 2016, that 10 billion USD had been lifted from the Iraqi Central Bank and there would be an ongoing investigation.[18]  Today, various pseudonymous forex traders, such as The Dinar Guru and Mtn Goat who recently wrote on how the 2016 Presidential election should have accelerated action on the Iraqi dinar, have advised to buy up IQD before the Iraqi Central Bank revalues it. These reported frauds and scams are some of the ways which IS and other terrorist groups may utilise for funding or laundering. What is more, speculation on the Iraqi dinar reveals questionable correlations.

Terrorist groups and fraudulent criminals are not the only force undermining the Iraqi dinar.  Under the Rojava Plan,[20] various Kurdish groups across Syria may be developing a cyber-infrastructure, including cryptocurrency, mesh networking and a Kurdish Ubuntu version, that can seriously challenge the current Sykes-Picot border between Turkey, Syria and Iraq.  Even the Kurdistan Regional Government of Iraq boasted the Swiss dinar in circulation prior to the 2003 invasion, with a value of up to 300 Saddam-faced Iraqi dinar to one Swiss.[21]

eDinar: the Ottoman general’s problem

The concept of dinar going digital mentioned in jihadi forums, and the framework proposed in ‘Bitcoin and the Charity of Violent Physical Struggle’, has precedence in both legitimate and illegitimate markets. One use of the concept of an e-Dinar was already introduced by the Tunisian government, whose e-Dinar (unrelated to emerging cryptocurrencies and terrorism) works as a payment system for municipality services through the Tunisian Post.[22] This system was proposed to provide banking services access to nearly half of Tunisians who had been without access prior to its inception over a decade ago. Since December 2015, it was meant to be integrated into a comprehensive phone app that connects cryptocurrency and National currency (Tunisian Dinar) e-wallets, so users will be able to convert from the Postal app, developed by Monetas, in full centralised control of the Tunisian Post, markedly not a banking institution.  However, signing it into policy is one thing, putting it into practice is another.  Separate from Tunisia, a questionable cryptocurrency (perhaps a scam) has been developed in Southeast Asia by the same name, eDinar or eDinarcoin, making the claim to be backed in gold with 20% ROI.  The naming convention is endless and many times e-Dinar or eDinar are interchangeable.
With these fantastical eDinar schemes, the proposal of an electronic Islamic Dinar or others like DinarDirham, linking gold to cryptocurrency is not far off.  Fake cryptocurrencies are popping up everywhere, drawing investors to blow cash for the thrill – or worse – potentially providing a means of filtering and laundering off dirty money.  All of them claim to be backed in gold, and while this is not definitive today, it could very well be in the future if coupled with other technologies such as smart contracts and blockchain imbued gold, perhaps connected to external smart vaults or smart locks containing gold bullion which only open following a payment from agreed-upon e-wallets.  Further exploitation of smart contracts to link gold to cryptocurrency presents a plausible threat vector to disrupt current global economic order, advancing terrorist (and criminal) motives. The legitimate Tunisian e-Dinar scheme can face serious abuse and perhaps collapse as over 3000 IS fighters wielding Tunisian citizenship return.  In addition, smart contracts might be reliably used to execute last will and testament of martyred fighters by releasing a bitcoin wallet to the family of the deceased.  In coordination with traditional Islamic hawala practice (see image below), tracking transactions that connect physical property with cryptocurrency will be virtually untraceable.  Some reports claim IS accepted a wallet worth over 3 million USD and others that Anonymous stole millions from their digital coffers, challenging the Center for a New American Security and Foreign Affairs claims.


Hawala is the form of money transfer (2a) between Alice (A) and Bob (B) through two wealthy, trusted intermediaries (2b).[23]


Worth one’s weight in e-gold?

Fundamentally, Islamic banking and sharia-compliant finance differs from Western banking in that no interest or fees can be collected or extracted from loans. Thus, a Ponzi scheme of sorts of the eDinar cryptocurrency would be considered haram.  Furthermore, built from the funding collected under the Muslim obligation of zakat, the religious tax similar to tithing, the first Caliph Abu Bakr established Basic Universal Income during his short reign around 632-634A.D.[24]  Maintaining non-usury principles, IS criticized OPEC countries who accepted the petrodollar, culminating in the rise of hard-lined petro-Islam as addressed in the Return of the Khilafah video.  Since 1973, there has been a (not-so) silent war being waged between Western banks and the Middle East for control of the petrodollar (a Sisyphean task against the U.S. dollar from its inception).  With the expanse of extra-Mesopotamian oil reserves, this conflict has escalated into a virtual clash of civilizations. Recently, Shadow Brokers leaked an NSA trove of operations showing that Dubai-based banking group EastNets had been compromised via its SWIFT networks[25] (SWIFT was also founded in 1973, in Brussels).  Although the NSA’s mission was primarily to monitor for national security threats, such as terrorist transactions in the build-up for the proxy war in Syria, it manifests a critical vulnerability and possible blowback. Many Middle Eastern banks hold separate branches for the sharia-compliant or the usury-based, however the former comprises less than 2% of the world’s finance. The EastNets compromise would affect partners across several countries, from Hong Kong to New York.
The CNAS and Forbes articles provide an updated glimpse of the lack of use of cryptocurrencies by jihadi groups. However, given that massive state level corruption or subversion has occurred, including vulnerability of critical infrastructure, with heists such as the NSA’s infiltration of EastNets, the current financial system may push wealthier individuals and patrons to also adopt a cryptocurrency, or a return to the pre-1973 gold standard wrought in silicon.  As shown by the dip in the Iraqi Dinar in 2016, it is clear that whatever IS factions have been doing, whether through bank heists, gold minting, or exploring cryptocurrencies, they have made a clear impact on a central bank. As with new cyber-weapons being developed from the leaked arsenal of the CIA and NSA, new tools to infiltrate banking systems will manifest, and a trustless system not dependent on state governments will certainly develop (with banks still considerable contenders in this new frontier). While IS may not benefit directly from these changes, their insurgent tactics to make the Iraqi Central Bank bleed but not crash, to split it between gold and petro-dollar, have paved a path for future organizations, such as the Rojava Plan.
As Western countries hole up on gold reserves and continue to treat Bitcoin like Monopoly money, less developed countries might provide experimental grounds for corporations to test cryptocurrency technologies (such as Swiss-based Monetas’ relationship with Tunisia or London-based Taaki’s relationship with Rojava).  It will be important to allow for the free and organic development of these systems to avoid the postcolonial pitfalls that pharmaceutical and oil industries reinforced throughout their globalization processes.  Although IS has failed to establish a universal model for such counter-Western financial development, it will be interesting to see how compatible Islamic finance, in both legal and customary, will be with cryptocurrency.  Falling short of reality, it’s a far stretch to assume current parties involved in this banking war will overcome historical levels of corruption to adopt systems like blockchain that not only can guarantee anonymity, but also full disclosure – that is, an end to embezzlement and the culturally-acceptable baksheesh.  As opposed to gold, cryptocurrency is the double-edged scimitar.

[1] McCrow. History Interrupted, the Art of Disarmament. Hoerle-Guggenheim Gallery, New York. April 30 – May 28, 2015,

[2] Goldman, Zachary K., Ellie Maruyama, Elizabeth Rosenberg, Edoardo Saravalle, and Julia Solomon-Strauss. “Terrorist Use of Virtual Currencies: Containing the Potential Threat.” Center for New American Studies Reports,  ETH Zürich Center for Security Studies.  May 2017.

[3] Manheim, David, Patrick Johnston, Josh Baron, and Cynthia Dion-Schwarz. “Are Terrorists Using Cryptocurrencies? New Technologies Could Lead to Their Widespread Adoption.” Foreign Affairs, 21 April 2017,

[4] Wikileaks. “H: France’s client & Q’s Gold. sid.” Hillary Clinton Email Archive, Accessed 10 October 2016.

[5] Ibid.

[6] Ensor, Josie. “Islamic State announces its own currency.” The Telegraph, 14 November 2014,

[7] Glaser, Daniel. “The Evolution of Terrorism Financing: Disrupting the Islamic State.” The Washington Institute, 21 October 2016,

[8] Szabo, Nick.  “Bit gold.” Unenumerated, 27 December 2008,

[9] Published under the Twitter account @AmreekiWitness, in reference to America

[10] Muadh, Zubair. “Supporter: the Islamic State Does NOT Use Bitcoin.” DeepDotWeb, 14 September 2014,

[11] Holmes, Frank. “Top 10 Countries with the Largest Gold Reserves.” Forbes, 26 May 2017,

[12] Look, Carolyn. “Germany Gets its Gold Back Faster with Job Seen Done in 2017.” Bloomberg Markets, 9 February 2017,

[13] Charkati, Izat. “ISIS introduces new gold currency.” Al-Masdar al-’Arabi News, 4 July 2016,

[14] Ibid.

[15] Sanders, Lewis. “‘Islamic State’ gold remains hard to trace.” Deutsche Welle, 21 November 2016,

[16] Manheim, David, Patrick Johnston, Josh Baron, and Cynthia Dion-Schwarz. “Are Terrorists Using Cryptocurrencies? New Technologies Could Lead to Their Widespread Adoption.” Foreign Affairs, 21 April 2017,

[17] Ragan, Steve. “After Paris, ISIS moves propaganda machine to darknet.” CSO Online (From IDG), 15 November 2015,

[18] Iraqi Reporter. “10 Billion U.S. Dollar Stolen from Iraqi Central Bank.” 17 November 2016,

[19] XE Currency Charts: USD / IQD. 2007-2017, Accessed March 2017.

[20], website is closed, see

[21] Foote, Christopher, William Block, Keith Crane, and Simon Gray. “Economic Policy and Prospects in Iraq”. The Journal of Economic Perspectives. 18 (3): 47–70. Summer 2004,

[22] Tunisien La Poste.

[23] Hawala. Wikipedia.

[24] Clark, Grace. “Pakistan’s Zakat System: A Policy Model for Developing Countries as a Means of Redistributing Income to the Elderly Poor.” Social Thought 20.3-4 (2001): 47-75.
It’s been argued that fiat virtual currencies and cryptocurrencies might help make BUI possible.  See

[25] Greenberg, Andy. “Major Leak Suggest the NSA Was Deep in Middle East Banking System.”  Wired, 14 April 2017,

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