This article was originally published by Syria Deeply.
By Ahmad al-Bahri
Islamic State authorities have outlawed the circulation of two Syrian banknotes issued by the Assad government in Damascus, in what some believe is a precursor to a complete phasing out of Syrian currency in areas under the group’s control.
Religious police in the jihadist group’s de facto capital of Raqqa have outlawed the 500 and 1,000 Syrian pound notes, issued in 2013 by the Syrian government in Damascus. The illegal currencies are to be replaced with older or smaller bills and dumped in areas outside the jihadist group’s controls, according to a memorandum obtained by Syria Deeply.
The announcement reads:
Announcement to all Exchange Shops: We have decided, with the help of God, to ban the use of the newly issued currency by the Alawite regime (the 1000 bill and the 500 bill) in our territory starting the date of the announcement. Sep 27. Exchange shops should not use it or exchange it. They should only take it out of the Islamic State areas. And anyone who opposes this law will be punished, starting from 14 November. God bless and guide you to the right path.
“ISIS informed all currency and exchange businesses about the new law,” Abu Mahmoud, the owner of a currency exchange business in Raqqa, told Syria Deeply. “They instructed us to take the newly issued bills and replace them with either older issues or smaller bills. We’ve been instructed to take the newly issued bills that we gather outside the Islamic State’s borders, to areas controlled either by the regime or by other opposition factions.”
Members of Raqqa’s Hisbah office – the Islamic State’s religious police – claim the reason behind the new law, which was issued at the end of September 2015, is to protect citizens under the group’s control from financial loss.
“We prohibited their circulation in order to protect Muslims from financial losses,” said Abu Muhammad, a 37-year-old member of the Islamic State. “There are other bills that people can use. We want them to exchange these newly issued bills with other ones, so that they do not lose any money, especially if they want to use them outside Syria.”
According to Abu Muhammad, the Islamic State will soon issue its own currency – a gold, silver, and copper coinage rumored to be prohibitively expensive – which will be the only currency accepted in areas under the group’s control.
Citizens of Raqqa with whom Syria Deeply spoke, however, said the new law was a pretext for the Islamic State’s foreign cadre to garner extra profits from the currency exchange business. Mazen al-Abdalla, a 28-year-old media activist from Raqqa, believes the new law is just another technique the Islamic State will use to exploit people under its control.
“For months now,” Abdalla told Syria Deeply, “the word on the street has been that the Islamic State would issue its own gold and silver currency, and that Syrian currency would eventually be eliminated.”
Most of the jihadist organization’s non-Syrian fighters have a hand in the currency exchange business, according to Abdalla, arguing that the currency switch isn’t just a simple state-building move by the Islamic State, but a scheme to make money.
According to recent exposes published by Der Spiegel and the Daily Beast on the inner workings of the jihadist pseudo-state, most of the group’s upper echelon isn’t actually from Syria. The top leadership, in fact, is mostly Iraqi, which makes sense when the group’s origins are taken into consideration. Similarly though, argues Abdalla, exchange offices in Raqqa and throughout the majority of the jihadist-held territory are either fully or semi-controlled by foreign members of the Islamic State.
According to the media activist, people in Raqqa have been preemptively trying to exchange whatever foreign currency they have before the Islamic State authorities outlaw its use entirely. Businessmen, storeowners and average employees alike are afraid the value of their Syrian currency in Islamic State-held areas will soon completely collapse. “All my cash savings are in the newly issued 500 and 1,000 pound bills,” said Abu Bassil, a 45-year-old man from Raqqa.
“According to the new law, I have to exchange them as soon as possible. I can hand them over and receive smaller or older issue bills. But I’m afraid ISIS will issue its own currency soon, and in that case, I might lose all my savings,” he told Syria Deeply, saying he was planning on exchanging his savings for a foreign currency.
“The Syrian pound is worth a great deal less than it used to be, even though it was a few months ago, and it’s only getting worse. I’ll probably lose about one-third of my savings. But I guess one-third is better than losing all of it,” Abu Bassil said.
Rumors that the Islamic State’s monetary authorities in Raqqa may soon issue their own currency have left Raqqa’s citizens equally panicked. “If this really happens, it means that we will have to be rich in order to be able to buy all that gold and silver money,” Abu Bassil worried.
While the question remains whether the currency switch is just for show, or a secret money maker for Islamic State foreign elites, Mazen al-Abdalla, the media activist, is sure of one thing: Somebody’s making money off the switch.
“We’re talking about exchanging and taking an entire currency off the market,” he said. “There’s a lot of money to be made.”
Ahmad al-Bahri is a contributor at Syria Deeply.
[Photo courtesy of Syria Deeply]