What is e-dinar?

silver (e-dirham), from one customer account

to another. A secure, convenient interface is
e-dinar is an exchange system enabling the provided for customer entry of transaction orders.
electronic transfer of gold and silver between All cleared transactions entail an increment or
accounts. e-dinar and e-dirham are 100% decrement of one’s e-dinar / e-dirham balance.
backed by physical gold and silver.
The system calculates exactly how much metal
A quantity of e-dinar / e-dirham constitutes title belongs to each particular customer.
to a precise weight of this physical gold/silver.
e-dinar FZ-LLC is a Dubai Corporation which All gold and silver is held free of lien or
operates the e-dinar system. encumbrance. e-dinar does not engage in future
contracts or any form of leveraged derivatives.
The primary function of the e-dinar system
is to render payments, in gold (e-dinar) and No physical gold/silver is listed unless e-dinar

Dr. Zeno Dahinden, CEO of e-dinar, (far right) at dinner with Dr. Tun Mohamed Mahathir in Istanbul, spring 2007.
DGC Magazine June Issue § 9
e-Dinar

has rendered payment for it. We actually started to mint the first gold dinars and
silver dirhams in 1992, at that time still hammered
(Q) When was the original e-dinar company by hand....
founded? (A silver dirham from the first batch in 1992)

We founded the original e-dinar company in August

2000 in Labuan, Malaysia.

(Q) Why did you found the original e-dinar

company in Malaysia?

The incorporation was purposely timed to precede

a large e-dinar conference at the Islamic Arts
Museum Malaysia (IAMM) in Kuala Lumpur,
November 2000. At that event, both Dr. Tun
Mohamed Mahathir (at that time PM of MA) and his
successor Datuk Seri Abdullah Ahmad Badawi (the
current PM of MA) received complementary sets
of gold dinars and opened their e-dinar accounts
publicly on stage. They were among the very first
and most illustrious e-dinar account holders.

As you probably know, we ‘converted’ Dr. Mahathir

in the late nineties to become an outspoken
champion of the gold dinar which he remains to People often asked us why we would ‘go back
this day. Being the visionary he is, he transcended to the Middle Ages’ by issuing a gold and silver
the use of gold from reserve currency and coins currency, in their view a barbaric relic? Our answer
to international trade - well understanding that the in short:
importance of nation states will continue to decline
in favor of global trade. 1. to offer people real value rather than a
promise-to-pay
While he publicly advised the Saudis to accept 2. to help prepare the grounds for renewed
only gold in exchange for oil, he championed the monetary discipline in the face of impending
idea of using gold for the settlement of international financial collapse, e.g. through the ‘subprime’
trade between OIC countries (Organization of fall-out
Islamic Countries). International trade would thus
be accounted for in gold and would be regularly Let me explain: the termination of the Bretton-
netted against national gold reserves. As a result Woods-Agreement by President Nixon in 1971
of each settlement, gold would move physically represented the end of gold’s traditional role as
between countries. reserve currency. The obvious reason for this step
was to liberate money creation from the constraining
James Turk from GoldMoney shares a similar ‘shackles’ of gold thus allowing central banks to
view when he says that ‘gold’s principal use in the create an unlimited amount of new money out of
coming years will be in cross-border commerce, and nothing (paper money is actually created from
principally by companies rather than individuals’. debt – since debt is an obligation and not a value,
We could not agree more. new money draws its value from existing money
and thereby devalues the currency and creates
(Q) When and why did you mint the first gold inflation).
dinars?
The obvious results were exorbitant interest
10 § DGC Magazine June Issue
 e-Dinar

rates in the US (well above 15% by 1980) and an

unprecedented Bull Run in gold (from 44 USD in (Q) There seems to be some hint of an ‘unknown
1971 to 850 USD per oz by 1980). international corporation’ from the Middle East
purchasing a large position in the e-dinar
The sudden availability of ‘unlimited’ liquidity company near the end of 2003.  Can you give
also gave rise to what we call today globalization us any more details on this purchase, such as
which feeds off unlimited capital. Globalization what company and what is their participation
started with an unprecedented wave of corporate in the operation?
takeovers in the early eighties (the junk bond era)
and is increasingly threatening the ethical and The partner company is an international real
moral basis of the human contract through an estate developer with offices in Dubai and other
extreme form of transnational capitalism which is Middle Eastern countries. The main contribution of
beyond the control of national laws and regulations the partner company is to open Saudi Arabia for
- what Loretta Napoleoni refers to in her inspiring e-dinar where they own prime properties in Mecca
book ‘Rogue Economics’ as the transmutation of and Medina – key places to promote the gold dinar
nation states into market states (Seven Stories to millions of pilgrims passing through every year.
Press, NY, 2008).
As a result of this partnership, we founded a new
To summarize: e-dinar company in Dubai Internet City (DIC) with
• Our aim is to put real value back into the an onshore Trade license which I manage as
hands of the people and rather than letting it CEO and in which I continue to hold a controlling
accumulate in the hands of a very few. interest.
• Our ambition is to help set-up an alternative to
today’s out-of-control monetary systems. (Q) When did the company formally separate
from e-gold and what were the reasons for the
(Q) Besides yourself, were there any other separation?
original founders of e-dinar?
We amiably separated from e-gold at the end of
Apart from myself, the original team included Dato 2004. The main reason for the separation was
Abdul Rahman Shariff, a Malay business man who our growing realization that, while having learned
helped establish the relationship with the Malay a lot from e-gold, our continued dependence on
government and Fernando Vadillo who laid the e-gold’s backend database and processes (e.g.
conceptual basis for the gold dinar. bullion purchase and storage) was preventing us
from reaching our full potential. And the longer we
(Q) What type of partnership did the company waited, the more customers we would loose during
form with e-gold around 2000? the separation.

We made first contact with Douglas Jackson (CEO

To enable the separation, we developed our own
of e-gold) in late 1998 and were fascinated with the
backend software and established our own bullion
prospect of complementing our physical bi-metallic
procurement and storage processes. Today, we
currency with a digital gold currency (DGC). I then
operate as follows:
visited Doug Jackson in Florida in 1999 where Bullion purchase and dinar/dirham mint:
we hammered out a unique agreement whereby Emirates Gold in Dubai
e-dinar became a self-contained front-end sitting
Bullion storage:
on top of the e-gold database. As part of thisEmirates Gold in Dubai and Embraport in
agreement, the head of our software team was Switzerland
Transport: VIA MAT Securitas in Switzerland
invited to work with the e-gold team in Florida.
Custom orders (custom bars, medallions):
To my knowledge, nobody else was ever granted Emirates Gold (e.g. State Opera; Berlin
such an ‘intimate’ relationship with e-gold. Philharmonics)
DGC Magazine June Issue § 11
 comparison to credit cards  or
PayPal?

Transaction fees are 1% of the

transferred amount, but not more
than 0.015 e-dinar (~ 1.90 USD) for
transactions in gold or 0.5 e-dirham (~
0.88 USD) for transactions in silver. This
represents only a fraction of the fees
charged by credit cards or PayPal.

(Q) Every e-dinar account holds

two balances, an e-dinar balance
(gold) and an e-dirham balance
(silver).   I’m going to assume that
the e-dinar(gold) is the most popular
with customers, do many users
transact in silver e-dirham?

Your assumption was certainly true until

we added silver on request by one of
our largest customers some two years
ago. Since then, silver has really taken
off and we buy in a typical month up
to one ton of silver and growing. In our
opinion, silver is still substantially under
The owner and CEO of Emirates Gold, Mohamed priced as compared to gold. On the downside, the
Shakarchi, is a close personal friend, whom I have silver market is much smaller than the gold market
known for well over 10 years. Since I am Swiss, it and thus lends itself more easily to manipulation
probably helps that Mr. Shakarchi lived 25 years by a small number of large traders.
in Switzerland, at that time the owner and CEO of
Shakarchi Trading. In recent months, we observe a growing number
of clients who add a silver balance to their account
Even though I could never identify with certain and use it for payments.
aspects of e-gold’s business model (e.g. their
support of HYIP schemes and online gambling (Q) Does the value of an e-dinar or e-dirham
sites which we do not allow in e-dinar), I admire account move up or down with the prices of
Doug Jackson as a true pioneer of DGC. With the gold and silver?
exception of James Turk from GoldMoney, almost
all DGC players have modeled their operations Yes, it moves proportionally to the price of gold
based on Doug’s ideas and concepts. and silver. When funding an account with e-dinar
or e-dirham, the customer buys physical gold or
(Q) Are any of the customer online silver. Thus the account balance is recorded in gold
transactions reversible? and silver (by weight). All other currencies which
are displayed in the account balance fluctuate with
Online transactions (spends) are not reversible. changes in the gold and silver prices.
Once the transaction is complete, the sender
cannot undo it. (Q) I like to keep the bulk of my personal funds
in digital gold accounts, but occasionally I
(Q) What are your transaction fees in need a fast wire out to pay for something, if I
12 § DGC Magazine June Issue
 e-Dinar

have a gold balance in my

e-dinar account and need (Q) Regarding
to send a wire to a friend compliance, I know that
in the UK, can I sell my e-dinar is not a bank
gold and direct the wire however your customer
payment to him? identification and AML
rules are very strict
You can certainly do that. (verified customer name
But please let me qualify & address and source of
my statement. One of the funds required)
ways that we are different
from other DGC systems is You are right, we are quite
that e-dinar is for the time strict both in our Customer
being used primarily as a Acceptance Policy as well
store-of-value rather than a payment system (this as our transaction control with regard to third-
is to some extend intentional). As a result, most party transactions. This is to discourage unwanted
out-exchanges go back to the bank account the elements before they enter the system which we
funds originally came from. If third-party out- have successfully done. We incidentally modeled
exchanges occur (> 1000 USD), we first request our Customer Acceptance Policy based on
an explanation for the reason of payment before GoldMoney’s policy which is among the strictest
releasing it. in the industry.

This is done to prevent money laundering at its Even though our Customer Acceptance Policy
root: slows down the growth in new accounts, our
key customers appreciate the strict controls we
• We do not allow third party in-exchanges have in place and thus feel more secure given
into e-dinar accounts. In other words, in- our tight control of operational risk. Operational
exchanges are only accepted from the e-dinar risk is incidentally at the core of the new Basel
account holder. We have in the past returned II regulations from the BIS (Bank of International
third-party in-exchanges for that reason. Settlement).
• We carefully track and monitor the
comparatively small number of third-party out- (Q) Why Dubai and what are the advantages
exchanges of being located in Dubai?

(Q) Does e-dinar have established mints in the Dubai is where the action is. Today, Dubai is the
United Arab Emirates or Indonesia? key business and trade hub for the Middle East,
the Subcontinent and South-East Asia.
We do most of our minting with Emirates Gold in
Dubai. We have some local minting operations in The main advantages of being in Dubai are:
Indonesia and are looking for ways to mint silver • Centre of bullion trade for the Middle East
dirhams in Malaysia to avoid import and custom and Asia (Dubai is also called the ‘City of
duties on silver. Gold’)
• Excellent security and governance of bullion
(Q) Can you say that the e-dinar system is free trade (the expropriation that occurred in
from any financial or counter party risk like the US during the depression would be
those associated with the banking industry? unthinkable in Dubai)
• Very business friendly allowing 100%
Yes, absolutely. Since we always have more bullion foreign ownership
in stock than we have in circulation, there are no • Ideally situated for our target groups both
financial counter party risks. through its trade hub function as well as its
DGC Magazine June Issue § 13
 e-Dinar

time zone (e.g. 80% of the East-West trade 1000 USD in total gold and silver need to send
passes through Dubai) their certified copies by postal mail.
• No VAT or income taxes
(Q) Regarding financial compliance, what (Q) May I ask approximately how many
jurisdiction’s regulation does e-dinar follow? account holders are currently in the e-dinar
system?
e-dinar follows UAE Financial Regulations. Even
though e-dinar is not a bank, we require full Out of approximately 9000 customer accounts in
compliance with key UAE (United Arab Emirates) total, we have roughly 6000 active accounts, i.e.
financial regulations to: accounts with a gold or silver balance.

• prevent any kind of criminal behavior or (Q) Can you offer us any stats on how much
wrong doing gold or silver is currently on deposit backing
• best protect the long-term interests of our the electronic units?
customers
• avoid potential business disruption as a At present, we do not publish figures on total bullion
result of regulatory compliance issues in storage. What I can tell you is that roughly 45%
of all in-exchanges remain in long-term bullion
(Q) As a new account holder, am I required storage under the custody of e-dinar while 55%
to send you certified copies of my proper are, within one year of deposit, out-exchanged
legal identification before wiring funds to my or for the most part redeemed in gold dinars and
e-dinar account? silver dirhams, bullion bars and sometimes custom
medallions
Yes, absolutely. As a matter of fact, we do not
publish our bank details on the e-dinar website. (Q) If my online account contains 10 e-dinar
and 10 e-dirham, can I redeem the electronic
version into actual gold dinar and silver dirham
and have your shop send them to me?

While one electronic e-dinar corresponds to one

physical gold dinar, one physical silver dirham
costs approximately 30% more than an electronic
e-dirham (due to proportionally higher minting
costs). We will naturally send your dinars and
dirhams to your postal address (additional shipping
and handling fees apply).

You therefore have no choice except to go through Smaller orders can occur through our web store
our Customer Acceptance Process as follows: and be sent by postal mail while larger orders
should go through e-dinar and will be delivered
All e-dinar customers must - in addition to their by VIA MAT Securitas. If you do not have gold in
contact information entered online - send us a your e-dinar account, you can pay your web store
certified photocopy of their passport or ID card balance via bank transfer.
before we release our bank contact details to
them. (Q) Can you tell us, are the majority of e-dinar
online accounts used by individuals, merchants
Small account holders who plan to buy less than and/or companies for online commerce?
1000 USD in total gold and silver can scan and
email their certified copies of passport or ID card. Most of our accounts are held by individuals. Over
Large account holders who plan to buy more than the last two years, we have begun to build up a
DGC Magazine June Issue § 15
e-Dinar

16 § DGC Magazine June Issue

 e-Dinar

and I applaud his visionary and pioneering role in

the promotion of DGC. I wish him all the best and
hope that he will be vindicated once the dust has
settled.

(Q) Is it possible to open an e-dinar account,

transact business both receipts and spends
small but growing number of large merchant in e-dinar without any verification of the
accounts, some of them in international trade and customer’s identity?
the bullion and coin business.
All customers of e-dinar must comply with our
In addition, we have been awarded a contract with Customer Acceptance Policy (CAP). This means
the Malay Opposition Party to supply them with that every customer must first deliver proof of his
gold dinars and silver dirhams as well as DGC or her identity before any transaction can take
services. Since their recent victory in four states, place.
they plan to expand their Ar-Rahn gold dinar outlets
from currently 11 to 100. (Q) Is e-dinar set up to communicate with
(ref. http://www.e-dinar.com/html/img/kelantan.jpg )
customers using PGP?
Excerpt from Wikipedia: On the 20th of September,
PGP is available as an option. Every customer can
Kelantan became the first state to launch gold dinar
provide a PGP key as part of user registration. If
coins. It features the Kelantanese state crest, the
the PGP key is present in the customer profile, all
date of production, as well as the weight and purity
communication between the e-dinar system and
of the gold used on its face. The DEK is similar to
the customer’s email address will be encrypted.
the original dinar in weight and purity of gold used.
This is particularly recommended if the customer
The coins can be bought and sold at the Kelantan
is using auto-notification (an account function
Corporation Bhd (Perbadanan Kelantan Bhd) and
whereby the system is sending email notifications
all eight Ar-Rahn Islamic pawnshops in the state.
upon receipt of funds).
(Q) How is the value in a user’s account
(Q) Is there any minimum transaction size on
displayed? What denomination?
an e-dinar account?
As mentioned before, our accounts are measured
There is no minimum transaction size. e-dinar
in weights of gold and silver. The gold balance is
can be used for micro payments as well as large
displayed in e-dinar (1 e-dinar = 4.25 grams of 24
transactions.
carat gold), in ounces and in grams of 24 carat gold.
For silver, the balance is displayed in e-dirham (1
(Q) e-dinar provides a secure merchant
e-dirham = 3 grams of 999 silver), in ounces and in
interface (for integration into shopping cart
grams of 999 silver. Both gold and silver balances
software). Is this feature popular with users?
are also displayed in USD, EUR, AED, CHF and JPY.
e-dinar offers two interfaces for automation. The
(Q) I’m sure you are aware of the legal issues
merchant interface can be used for integration of
involving e-gold right now, do you have an
e-dinar payments into shopping cart software and
opinion or any comment on that situation?
the API allows automated access to the account
(retrieve account balance, account history, issue
Even though e-gold might have been somewhat
automated spends). Both interfaces have several
lax with Customer Acceptance and the type of
configuration options including callback function
businesses they support, I can certainly vouch
and are used by a growing number of customers.
for Doug Jackson’s personal integrity (he never
Naturally, the merchant interface is the more
failed me and I could always depend on his word)
popular.
DGC Magazine June Issue § 17
e-Dinar

(Q) Who is your preferred customer? With the exception of some newly emerging
Our preferred customers are: global magazines, we do not pursue an active
advertisement strategy but rather depend on
• individuals who want to keep some of their passive marketing through newspapers and TV,
long-term savings in bullion as protection particularly in Malaysia and Indonesia.
against inflation (Q) Can I fund my e-dinar or withdraw funds
• bullion and coin dealers that we supply with through a third party exchange agent?
bullion, dinars & dirhams and custom products
• international trade companies There are some third party exchangers for e-dinar.
• governments such as the Malay Opposition Funding accounts directly through e-dinar is
Party that we supply with DGC services and naturally more cost effective and probably also
gold dinars & silver dirhams safer.

(Q) Do you have a target demographic (Q) How does an e-dinar account accrue
audience which you would like to attract? fees?  Is there an annual storage fee or is it
based on the amount in the account?
Our demographic target groups are the Middle East
and South East Asia, increasingly also China. We A storage fee of 1% per annum applies to
hope to attract more companies in international every account. This fee is covering storage and
trade as well as government agencies that want to insurance costs. The storage fee is calculated
promote the gold dinar. based on the average account balance and is
deducted monthly from the account.
(Q) Are e-dinar accounts promoted as online
savings accounts which offer an alternative to (Q) I think the dinar & dirham shop online is
Islamic banking?

Yes, our gold and silver accounts are 100%

halal and, in our view, the only acceptable
alternative to banking from an Islamic point
of view, be it ‘Western’ or ‘Islamic banking’.
I see in ‘Islamic banking’ not much more
than an insignificant variation of ‘Western’
banking and certainly not an acceptable
alternative to it. The only difference is in
the semantics and the models used to
calculate the bank’s profit (please note
that the biggest Islamic banks are major
commercial banks such as HSBC and
Citibank). Short of changing the underlying
money from paper to gold and silver,
‘Islamic banking’ cannot possibly be halal.

The only acceptable form of money from

an Islamic perspective is gold and silver –
there is no doubt about that.

(Q) Does e-dinar do any offline

advertising such as newspapers,
magazines, signage or television?
18 § DGC Magazine June Issue
 e-Dinar

an excellent idea. The operation seems very

convenient for users. Do you sell and ship a
lot of the gold dinars or silver dirham? How
popular are those sales with account holders?
Yes to both questions. We do ship a lot of gold
dinars and particularly silver dirhams and those
sales are very popular with our account holders.

In spite of (or maybe because of?) all the resistance

that we have met along the way, the gold dinar and
silver dirham are today among the most talked and
written about modern ‘coins’. Search in Google
under Gold Dinar and Islamic Gold Dinar to verify
this for yourself.

I would like to close this interview with another

quote from Loretta Napoleoni
(Rogue Economics; Seven Stories Press, NY,
2008; p. 341).

After painting an almost apocalyptic picture of the

world during the first 340 pages of her book, she
goes on to formulate on the last two pages the
only realistic alternative she sees to today’s rogue
economics as follows:
(freely translated from German)

‘The post-globalization era will require a clear

separation between the state and the individual:

• The state will have a monopoly on foreign

and financial politics based on the Shari’a
financial model with a new currency
standard coupled to gold
• The gold dinar will become the overall
measure of stability for all other
currencies and will find worldwide
recognition
• Shari’a economics (which forbids the use
of money to make money) will regulate all
business transactions and will challenge
and eliminate the self-serving aspects of
rogue economics (such as 500 trillion USD
worth of derivatives)

I would like to thank Dr. Zeno Dahinden for taking

the time to answer my questions.

Interview by Mark Herpel

DGC Magazine June Issue § 19