Equality of Dinar
Bismillahirrahmanirahim.
This is being written to answer Quezzo Corp inquiry what will happen to the othe DnD coins that has Tawheed inscription that is being minted other then the current "Matawang Shariah" Kelantan State and InshaAllah soon to be joined by Johor State .
The following are extracted from the book titled The Ethics of Money Production by Jorg Guido Hulsman.
The Precious metals would have become monies even if coinage had never been invented, because even in the form of bullion their physical advantages outweigh those of all other alternatives. There is however no doubt that coinage added to the benefits derived from indirect exchange, and that it thereforecontributed to the spreading of monetary exchanges. Coinages allows the exchange of precious metals without engaging in the labor-intensive processes of weighing the metal and melting it down. One can determine a metal weight by simply counting the coins.
Coins endows a. The mass of precious metal with an imprint that certifies its weight. The typical imprint says something to the effect that the coin weighs a total of so and so many grams or ounces (gross weight), with this or that proportion or absolute content of precious metal (fine wieght). This is why coin names were typically the names of weights, for example, the pound, the mark, the franc or the ecu. (For us in Malaysia currently we are looking at Dinar. The weight itself is debated, I will not touch it because I am not the expert on the subject matter.)
To be continued.... (QC, I write a bit at a time....)
Notice that the service depends entirely on the trustworthiness of the certifier, that
is, of the minter. If the market participants cannot trust the certificate, the
will rather do without the coin and go through the extra trouble of weighing the
metal and possibly melting it down to determine its content of fine metal. A trustworthy
coin economizes on this trouble and thus adds to the value of the bullion contained
in the coin; for example, a trustworthy 1-ounce silver coin is more valuable
than 1 ounce of silver bullion. People therefore pay higher prices for coins
than for bullion, and the minter lives off this prices margin.
Because the value of the certificate depends on the trustworthiness of the minter,
coins are typically used within limited geographical areas. Only the people who
know the minter are likely to accept his coins. All others will insist on being
paid in bullion or in coins they trust. This does not mean that in practice
every village needs a different set of coins. The geographical radius within
which a coin is used can grow very large and it can even become world encompassing if the minter has an excellent reputation. This was for example the case with the Mexican dollar coins that in the early nineteenth century circulated freely in most parts of the U.S. and
which have bequeathed their name to the present-day currency of this country.
Historically, minters have offered additional services that complement the certification of
weights. Thus one of the perennial problems of coining precious metals is that used
coins might contain a smaller quantity of precious metal than freshly minted
coins. If this happens, people are inclined to hold back the good coins for
themselves and to trade only the bad coins. To overcome this problem, minters
could offer their coins in combination with an insurance service; they could
offer to exchange any slightly used coin against a new one. This policy would
guarantee the stability and homogeneity of the coinage through time. Thus the
insured coins would trade at even higher prices, from which price differential
(the premium) the replacement expenses can be paid.A great number of monetary thinkers from the Middle Ages to our times have held
that coinage should be entrusted to the princes or governments, who, because
they were the natural leaders of society, were also the people to be naturally
trusted. The medieval scholastics knew full well that the princes frequently
abused this trust, placing for example an imprint of “one ounce” on a coin that
contained merely half an ounce, pocketing the other half of an ounce for
themselves. Therefore Nicholas Oresme postulated that the princes did not have
the right to alter the coins at all, unless they had the consent of the entire
community, that is, the entire community of money users.
Economic science has put us in a position to understand that competitive coinage is an
even better way of preserving the trustworthiness of coins. There is no economic reason not to allow every private citizen to enter the minting business and to offer his own coins. It is true that a private minter too might abuse the trust his customers put in him and his coins. But punishment is immediate: he will lose all these customers. People will start using other
coins issued by people they have reason to trust more. In a way, this competitive process also fulfills Oresme’s postulate that the entire community of money users decide about coinage. He held that “money is the property of the commonwealth”. On a free market, the money owners can assert this property right smoothly and swiftly. Each person who no longer trusts the minter A simply stops using A’s coins and begins to use the coins of minter B. Thus he leaves the A community and joins the B community.
Competition in coinage is no panacea. Abuses are always possible and in many cases they
cannot easily be repaired. The virtue of competition is that it offers the prospect of minimizing the scope of possible abuses. And its great charm is that it involves the entire community of money users, not just some appointed or self-appointed office holders. Down here on earth this seems to be all we can hope for.
Based on the above extract QC, there is nothing wrong with having private minters. There is a question of competition and therefore acceptability. When it comes to what is the fair exchange for the coins is again between two transacting consenting parties. There is no way either you or I can impose. Either we take it or leave. It may seem like a bitter pill to swallow but that is just what it is. My personal opinion is, based on my analysis with the current scenario and knowledge that is within my limited capacity is very simple. The coins that is backed by the state government or the sovereign will be the fore runners not the ones by the private minters. As the above literature also stated, coins are usually accepted within its own limited radius. Therefore it will be tough for Indonesian coins to be freely circulated into the market place if Malaysians themselves dictate they prefer a Malaysian based authority/soverignty coins. If you are a private minter, my question to you will be? How long can you sustain if the public goes for the "officially issued coins"
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