The Geopolitical Agency of Currency in the Islamic State

By Ollie Dixon

A few months ago Islamic State (IS) announced that it was to start minting its own coins. The production of gold, silver and copper coins is a move that is part of a number of state-making practices conducted by IS in Northern Iraq and Syria. Whilst much reporting has dismissed this act as dysfunctional and non-workable, is raises important questions about the role of currency as a geopolitical agent in the 21st Century. This article seeks to explain how the Islamic ‘dinar’, as it is to be known, is geopolitically productive as an object of resistance, and as an evocation of the past.

The Beit al Mal (treasury) of the Islamic State described the currency as a replacement to the “tyrannic monetary system” currently in place across Iraq and Syria. The coins will be imprinted with images of wheat, a shield and spear, mosque and a map of the world. This move is a deliberate reincarnation of the characteristics of ancient 7th Century Islam. After the leadership and death of the Prophet Mohammed in 632AD, powerful Islamic leaders, known as caliphs, conquered territory of the Middle East and North Africa, creating vast Muslim empires. These empires developed functioning governments, centred on Sharia law. Abd al-Malik, one such caliph, created a unique Islamic coin, a gold ‘dinar’, and silver ‘dirham’. This was minted in coordination with a quest for international monetary supremacy, to counter the systems to the East and West of its empire. It is this moment in history that the caliph of IS, Abu Bakr al-Baghdadi, is trying to conjure up and rejuvenate.

Justine Drennan makes the claim, in Foreign Policy magazine, that “it’s highly unlikely that the Islamic State’s dinar would ever be a stable or functional currency”. She outlines a number of plausible reasons surrounding inability to control territory, its universal usage, its store of value and medium of exchange. Similarly Stephen Mihm believes that this currency will do little for the advancement of IS: “Islamic State can only claim beheadings, kidnappings, slavery and terror. Minting a few coins won’t change that”. However, the currency must be understood as more than just a medium of exchange, but rather as part of a broader strategic narrative. This narrative aims to resonate with local populations, not international financial institutions. Therefore, a top-down analysis of the ‘legitimacy’ of the currency within global financial systems doesn’t go far enough in understanding its purpose.

The history of the ‘dinar’ produces a geopolitical agency that evokes previous powerful and successful empires. Such evocations exemplify how IS successfully taps into cultural and historical collective grievances in its claims for statehood, and ultimately a restoration of the forgotten Islamic Empire. Such narratives are enticing to a population with fresh memories of European colonisation, as well as relatable to those with resentment across the wider Middle East of continued US and Western-backed presence in the region. Therefore Drennan and Mihm’s claims of illegitimacy could be largely irrelevant to local populations given this historical context. This can be explained if we look at what the experiences of a local trader or farmer might be. Drennan claims that “it [Islamic dinar] won’t demonstrate ISIS’s legitimacy as a state, but rather its illegitimacy.” For a farmer in Northern Iraq, judging the legitimacy of localised trading currency in the international system is neither relevant nor productive. If the Islamic dinar offers a way of trading safely and securely with other individuals in your locality, then what makes it any less legitimate than a foreign US dollar controlled in far-away Washington. In fact its cultural associations might make it more relevant for this particular individual. As a result, the experiences of localised individuals are an equally important factor in the analysis of this currency.

Currency proposed by the Islamic State

Currency designs proposed by the Islamic State

Whether it is currency, justice, religious governance or other practices, IS promotes a narrative and governance system that appears omnipotent. The extent to which this power base is stable or sustainable is effectively hidden by visual and physical acts of statehood, the Islamic dinar being a case in point. The agency within the coin, helps resist traditional structures of power. Moreover, the geopolitical role of the Islamic dinar goes beyond just a purely resistive based role. The coin itself offers both an expression and function of geopolitical association. It takes the traditional financial function of currency, inverts its power structures through resistance, and encourages an evocation of Islamic empire. Such a complex web of geopolitical meanings, financial functions, and political activism are all at play in the Islamic dinar. Therefore, any analysis of the dinar has to take into account its geopolitical complexity in today’s Islamic State.

Image source:

In the 21st century, where monetary transactions are increasingly digital, the creation of the Islamic dinar is a useful reminder of the geopolitical significance of physical currency. As geographers, it can become easy to get lost in a world of connection, data activity, cyberspace and electronics and forget that deep rooted cultural and geopolitical instincts, are so often entangled in physical objects. After all, the images that are probably most associated with the rise of IS over the last six months are of armed individual clutching the IS flags. The proliferation of these photos supports the claim that cultural or national objects remain crucial geopolitical agents. As a result, we should not only be wary of dismissing the functionality and legitimacy of IS state making practices, as Drennan and Mihm do, but rather become attuned to the geopolitical significance of these very physical and visual actions. In this way, we might not only be able to understand IS better, but provide a narrative that might more easily counter IS, and relate to individuals under its influence


Ollie Dixon graduated from Durham University in 2014, with a BA in Geography. He studied a wide range of topics within political geography, taking a particular interest in issues of territory and the War on Terror. This lead to a dissertation thesis which analysed and mapped the CIA Program of Extraordinary Rendition. At Royal Holloway Ollie is focusing on matters of conflict analysis, terrorism and defence policy. He reads widely on these and broader issues of security in both Sub-Saharan Africa and Southern Asia. On finishing this masters course in September 2015, Ollie hopes to pursue a career as a research analyst in the political and security risk sector.


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