Dinar Shops

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2013 October

'What is the Wadi'ah?'

Interview conducted by WIM with Abdullah Seymour, Founder and Director of the company Wadiah Nusantara.

Please introduce yourself.

My name is Abdullah Seymour, I'm an English convert Muslim. I have been Muslim for ten years. I lived in Norwich in England for 5 years but now I live in Malaysia/Indonesia which is where I have been for the last year, establishing Islamic Muamalat in the region.

What is your role there?

I'm the founder and director of a company called Wadiah Nusantara, which is a safekeeping and payment system service for Gold Dinars and Silver Dirhams. I'm also involved in other aspects as well, such as circulating the coins, developing the network of both users and shops, minting the coins, supporting the sultans in collecting and distributing the zakat, talks etc.

What is a Wadi'ah?

Wadi'ah means safekeeping. Wadi'ah is first and foremost a matter of amānah (trust), a deposit left in trust with someone. Traditionally it was done on a personal basis, i.e. you are going on a journey and so you entrust your belongings with someone. In its primal form it was a service undertaken fisabilillah. The wadi'ah we have created is the first for at least 100 years. People open accounts with us and deposit their coins. We charge 1% of the value of the coin per year to cover the cost of safekeeping. They can redeem their coins from any of our branches. Once people have opened an account, they can then pay another account holder remotely using the internet, and without the use of any banks. For example, if you are in Frankfurt and you want to pay someone in Munich 5 dinars, instead of physically sending the coins to him instead you pay him online and he can go to his local branch and redeem his coins. Extend this system to businesses and what you have is a 100% halal alternative to usurious banking that has the potential to change everything.

logo Wadiah NusantaraHow long do you believe it will take to have a reasonable enough coverage of Wadi'ahs so the System can work?

We opened our first branch this year in Kuala Lumpur in Malaysia. In the next year we will have several wadiah branches in not just KL but also Singapore and Jakarta. Our expansion will accelerate massively once our software is live.

And then the Wadi'ah would be connected to an electronic Payment System?

Exactly. When we say electronic payment system we don't mean the money is electronic, but just the means of communication.

Much like you open an account with a bank, you open an account with our wadi'ah. And like online banking, whereby you can log in online and make payments, that is what you can do with our wadi'ah (once it is live). And like online banking, in which you can credit your account, you will be able to credit your account (i.e. buy coins) online. And like you can visit the bank and withdraw the paper money, you can visit our branches and withdraw the coins. The difference is that ours is 100% gold dinars and silver dirhams, with no banks, no paper money etc. It is revolutionary.

What is the difference to existing payment Systems? For example E-gold / E-Boolean PayPal there are several different payment systems in place already worldwide. What are your main differences?

Well the first difference is to systems like PayPal is that there is obviously only digits on a screen, there is no actual money moving and it is paper money anyway. We are 100 % gold 100% silver there are no electronic digits without physical coins being there. That's the first massive difference.

Secondly, ours is significantly cheaper to make transfers then people like paypal.

The third difference between ourselves and someone even like e-Dinar which is one of the most well-known and successful ones is that we have branches and you go to the branch and you can deposit and withdraw your coins at the branch. It is a more organic way of creating a payment system. You have the coins first and then you offer the safekeeping service and thirdly you have the payment system, rather than simply starting with the payment system and working backwards.

What elements in your vision would be needed have a functioning dinar economy?

To start with you need the coins, minted at as high a quality as possible. The coins must adhere to some kind of standard so that there is a definition of what a dinar is, a definition of what a dirham is etc. Standards ensure the security of the coins and the authenticity of the coins, but also it is not fair to ask traders to remember ten different standards of coins which all have different weights and values etc. For that reason we only safe keep World Islamic Mint (WIM) coins because they are trusted as the most secure and widely accepted coins on the market.

After the coins have been minted you must get them from the mint to the people. In our model we use a series of agents (wakala) who take a small premium.

Thirdly and most importantly a network of users and businesses where you can use the coins must be established and maintained because it has to be a currency it cannot be an investment. If it just an investment then that implies that the current system is fine and it is just in turbulent times that we put the money into gold and when the storm blows over we can go back to paper money and sell all our coins- that is not we are trying to achieve. We are trying to achieve something different which is that the current system is inherently flawed and can never be saved because it is built on a debt and a fantasy. So we have to move out of this system we take the paper money out of circulation and insert gold and silver instead. We shouldn't reverse this. Ideally this network of shops would be the souk (market). An Islamic market is the place where trade takes place and the coins circulate. Establishing a proper Islamic market is one of our core aims.

After the minting of the coins, the wakala and the network of users/businesses and market is the wadi'ah and payment system. This is where we are at now. Later we will bring forth the fulus (small change less than one dirham), the caravans, the guilds and the Islamic contracts of qirad and shirkat.

How are consumers and shopkeepers or businesses reacting to it?

There are many ways to answer that question you could come in from an Islamic purely legal point of view and say the current system is Riba and we are all involved in it and Riba has been declared war on by Allah and his Messenger. If we had taqwa of Allah we would say we cannot be part of this system and that is one way of looking at it, and enough of a reason for those who fear Allah. Another way of viewing it is that people's wealth is being confiscated through inflation and that is not just.

One of the greatest obstacles is that many people don't see a problem with paper money even though they would agree if asked that their money is worth less and less every day through inflation. In terms of getting users that's the main challenge that people don't really see a need for it even though the necessity of using real wealth is part of our Deen and they have chosen this Deen. If they do see a problem with the money then the next step is to activate change by actually using the coins and moving away from the banking riba system.

Most people are followers. If tomorrow Indonesia declared dinar and dirham as their national currency the people would just follow and accept it. People don't see the blatant theft before their eyes because it happens slowly and discreetly. Of course, when the economy collapses the game is exposed and the people will wake up. At that moment of monetary collapse, when there is social unrest and political upheaval, we must not rebuild the economy based on Western capitalist banking but on Islamic muamalat. That is our great opportunity. For now we are sowing the seeds and only the forerunners will join us initially.

But you already have shops participating?

Yes we have about 3000 shops in the region participating. Getting shops is not really the difficult bit. To get people to use and to see a need to use the coins on a regular basis is.

Could you give us an example of a place where it works where it has been established? How would the cycle work?

So the coins are minted by a physical mint and we work closely with several mints, but you could use any very high quality mint. I keep emphasizing the importance of having the best quality coins with security features. The minted coins are bought from the physical mint by the issuer. The issuer should be the Sultan but we have also experimented with a state company performing this duty too, such as in Kelantan, Malaysia.

The issuer sells the coins to agents. The agents are two tiers- the Master Wakala and the Sub Wakala. Master wakala are required to carry a larger minimum level of stock and they buy that stock and they sell the coins to the sub wakala. And the sub wakala put the coins into the hands of the people.

So the people exchange their paper money for dinars and dirhams and then the idea is that people spend the coins in shops and businesses (but ideally the souk). The activists amongst those users will find new shops and businesses. Growing the network of users is truly frontline work. The coins should circulate, so the point is that the users spend the coins and then buy more coins, so that the paper money is slowly withdrawn from circulation and is replaced by gold and silver- the opposite of what the banks did to us! Once a shop has accepted the coin they are encouraged to pay their suppliers with them if not pay their staff with them or spend the coins themselves in other shops or save them. What we are trying to avoid is shops accepting coins and then selling them back to us. Because this is anti-circulation. The interesting thing is the word dawla which the modernists have translated as 'Islamic State', the root meaning of the word is the circulation of wealth. Therefore when we get the coins to circulate we are actually creating the dawla of Islam.

The idea is to have closed loops in which the coins move from one party to another and do not come out of the system they should stay in the system. So we want closed loops rather than an open loop.

And how are your Experiences so far are you optimistic?

Yes. Firstly, we have the coins. In addition to our movement in Indonesia we also have three sultans who have issued the coins- the Sultans of Ternate, Cirebon (both in Indonesia) and Sulu and more will follow. So availability is not an issue.

Secondly we have a network of businesses who accept the coins and many of our daily needs can be met using the coins.

It has only just started, the movement has barely scratched the surface. It is all to come. Once the wadi'ah payment system goes live, I foresee huge strides forward. Furthermore we are certain that the current economic system will collapse and this will force people to look for something other than paper money and banks. We are setting the groundwork for this scenario.

So far the discourse in the Islamic world has not been dominated by the issue of gold and silver. The dominant model is the present model of the banks the "Islamic bank". Do you see a change in the discourse on a global scale? Obviously in South East Asia it is an issue people talk and reflect about. Do you think it is also entering other Muslim countries?

I think eventually it will but in the moment unfortunately the Muslim world is in a dreamlike state and basically the 'ulamah have been sold out to the banks and are paid huge sums of money by banks to make fatawa to legitimise banking and riba. So the 'ulamah have betrayed us. We call them 'scholars for dollars' because they have sold their soul for profit and there are very few left who have taqwa and fear Allah. We will change that and one of the top 'alims in Singapore has issued a fatwa proving the case against fiat money and the necessity of returning to real money. The irony is that in the West there is now a discourse about banking and people are anti-banking. Look we are in a conference hall in Berlin and an Englishman is telling a German who are both Muslims are speaking about that paper money has not worked, right in the heart of the banking world. In Malaysia for example they are just blindly following the American model and believe that their model works. While people in America are saying "no it does not work, capitalism has failed!" and are on the street protesting and wanting change, but they do not know where to turn. They are not on the streets in Malaysia, as they think the good times will last forever. So in one way they are a step behind on the other hand they are a step in front because we have this movement and it is in South East Asia. And when the dollar collapses, all the economies worldwide will have to rebuilt for they're all tied to the dollar. The Muslim world has a better chance to succeed at this moment because muamalat is half of our deen, and we have the model. All we have to do is activate it, and Allah will change the whole thing. Victory is by Allah.

Thank you for the interview.