When the telco-based mobile wallet ISIS (from AT&T, Verizon and T-Mobile) recently changed its name to Softcard, it was done partially to distinguish itself from the al-Qaeda offshoot terrorist group with the same name, standing for the Islamic State of Iraq and Levant. But the terrorist ISIS people have now decided to join the payments community. According to a statement the group issued Wednesday (Nov. 12), it will now mint its own money.
ISIS “announced the launching of its new currency as a way to separate its self-declared proto-state encompassing northwest Iraq and northeast Syria from the ‘tyrannical financial system imposed on Muslims,'” reported the Financial Times. “Abu Bilal al-Homsi, the nom de guerre of a Syrian activist who serves as a liaison to Isis, confirmed the veracity of the document announcing its launch. ‘This is a strike against the Crusader coalition and it’s a victory that the Islamic State has an economy and is self-sufficient.'”
The highest-denominated 5 dinar coin is set to contain 21.25 grams of 21 carat gold, worth about $694, while its lowest-denominated 10 flous coin would contain 10 grams of copper and be worth about 7 cents, the story said. “The proposed silver dirham coins would range in value from 45 cents to $4.50 at current rates,” the story said.
The currency will be overseen by what ISIS called a leadership council in the house of finance.
But rather than setting itself up to more independent from global economic influences—including those the U.S. and its allies routinely bombing ISIS—the currency move could make ISIS’s economy “even more heavily dependent on global fluctuations than most, specifically on precious metal and commodity prices.Where are they going to get the gold and copper? Isis will have to confiscate more property through theft and the spoils of war,” the story noted.
That influence is based on the economic premise that government treasury departments need to purchase the raw materials needed to make its currency and to then determine its value by comparing against global monetary standards. But if ISIS is literally stealing the gold and copper at gunpoint—or merely taking it after killing people—that is going to skew calculations about the cost of the raw materials.
There are also serious questions about whether anyone outside ISIS-controlled territory would accept the new currency, making global valuations pointless. As the Financial Times said: ISIS’s “self-declared state has no functioning ministries, nor is it recognized by any government in the world.”
True, but ISIS truly wants to create chaos, it should launch its own branded payment cards and a mobile wallet. If nothing else, it will likely do better than Softcard. Asking for someone to download an app while carrying hand grenades and automatic weapons can be awfully persuasive.