For this lengthy essay, we’ll explore some fundamental workings of the current monetary system. Although the intricacies of this system are complex and have been extensively documented in numerous books, we’ll focus on some key points, particularly the money creation process and the role of Riba in the functioning of the entire fiat system. This aspect is often overlooked by non-Muslims, as usury is not typically a concern to their worldview. Moreover, many Muslims, including those in the Islamic Finance industry and students of Islamic Economics, often fail to recognize and mention how deeply embedded usury is in our monetary system. Understanding the mechanisms of money is crucial for Muslims today, as even many esteemed scholars struggle with the basic principles and characteristics of how our money operates.

We’ll begin by exploring the concept of fiat money and the mechanics of fractional reserve banking, and we’ll highlight the implications this has on money creation. Next, we’ll examine how the Federal Reserve creates money through various operations. We’ll also touch on the often-overlooked ‘shadow banking’ sector that’s heavily involved in the usurious money creation process. Following this, we’ll briefly talk about the global “Riba Hegemony” and the enforcement of this hegemony by key international financial institutions, namely the International Monetary Fund (IMF) and World Bank, and how they siphon away the resources of developing countries through Riba. With this foundational understanding, we’ll investigate what truly backs the global fiat monetary system.