Money as a component of the economy: A reading into the two basic functions of money in Islamic-based and Interest-based economic systems

This paper attempts to shed light on the problem of defining money as a component of the economy and the consequent conflict between its two principle functions: as a medium-of-exchange and as a store-of-value. the conclusion reached is that interest-based systems favor,whilst also protecting,the role of storage-of-value versus the role of medium-of-exchange. on the other hand,the islamic-based system favors and protects money's function as a medium-ofexchange in contrast with its counterpart. the paper claims that zakat resolves the conflict between these two functions by limiting the dominance of the latter over the former. this is done in a rational and seamless manner,which is completely in line with the definition of money proposed by this paper. capitalist (interest-based) systems also attempt to limit the dominance of the store-of-value function (despite it being favored) through a number of temporary measures. however,in the long run,these measures result in entrenching the very thing they try to neutralize. through this suggested framework and its terminology,it is hoped that this study will pave the way for additional investigations to resolve lingering economic problems that have been ignored for generations due to the orthodox view of including interest and its associated instruments in almost every attempt to review or reform the economic theory.