“The value of one dinar today is greater than its value a year from now.” This rule is a foundational principle in finance, built around the best expected return on investment: profitability. Borrowing, in its financial sense, is based on the time value of money, through which the principal is repaid later together with an interest value tied to time. Whatever the mechanisms may be — conventional or claimed to be Sharia-compliant — they remain closely connected to the time value of money.

Financial systems were built on this interest-based foundation and continued to evolve until they reached the contemporary financial system — fiat, or paper money — whose floating value is derived from controlling cash flow by raising or lowering that interest rate. Central banks that manage floating currencies raise the annual interest rate on their currency in order to reduce the currency supply facing stable demand, thereby increasing both the scarcity and value of that currency, and vice versa.

Some economic philosophies praise this mechanism, through which scarcity is managed by official institutions. If scarcity were fixed, as with commodity money linked to gold before 1971, then population growth — which leads to increased production — would coincide with a clear decline in the prices of goods and services, due to the fixed quantity of money. These philosophies question investment that depends solely on the capital of the wealthy, objecting to investing in production whose price may later fall. This, they argue, encourages capital to remain idle in anticipation of that decline, which can then be exploited with unchanged capital. Yet those philosophies did not address the possibility that such stability could alter the very concept of lending. A wealthy person could then lend to a poor person with no significant return other than the success of production. Goods and services would decline in price, and the debt would be repaid at principal only — a principal whose value would now purchase more goods and services than before, precisely because the loan had gone to someone who contributed to higher productivity.

The financial order could not confront the automatic correction embedded in such a system, one over which it held no authority that could be exploited in the manner it desired. Thus emerged the current financial system in 1971, a system whose scarcity is controlled by global economies, their productivity, and their political and economic alliances. The financial order views this system as reconnecting finance to the time value of money, whereby present value, PV, becomes greater than future value, FV. In other words: “A dinar today is worth more than a dinar tomorrow.” If your business profit today is one hundred thousand U.S. dollars, its value one year earlier would be lower, because the Federal Reserve interest rate is greater than zero, and vice versa. The more population and productivity rise in a country with a floating currency, the more the scarcity of the money you hold declines, under the justification of stabilizing the prices of goods and services, or contributing to their gradual rise through what is known as inflation, in order to stimulate investment. Theoretically, it is as though this system says: “Do not hold money, for its value is continuously declining.” Can such money truly be considered a store of wealth?

As for attacking or questioning the economic — not religious — legitimacy of virtual currency as a concept, by promoting the volatility of its value and the absence of a central authority that guarantees rights and manages operations, this is something no one who understands the philosophy of the financial system can accept. This kind of currency is what corrects the course, making this form of money a true store of wealth. The reason is the near stability of its scarcity, or even its increase, relative only to growth in population accompanied by growth in productivity. Whoever sells today is more entitled to scarcity greater than that earned by tomorrow’s seller, because priority lies in precedence, not the opposite.

What threatens the financial order is not merely the decentralized mechanism of virtual currency, nor only the possibility of its misuse, but its direct effect on that order’s absolute authority. It overturns the fundamentals of finance entirely, so that future value, FV, becomes greater than present value, PV, in virtual money when population and productivity alone increase. This is what is more sound for the global economy. At that point, scarcity would no longer be managed by a central authority that derives political influence from doing so, but would instead be managed autonomously and economically, without interference from factors outside the sphere of production and development. Would that financial order accept a form of money that returns us to an economic age more efficient than the one it fled in 1971 in pursuit of economic and political ambitions?

How does scarcity affect trust in money?

Scarcity helps protect value when it is clear and credible. Money that can be expanded without discipline needs strong institutions to prevent trust from eroding.

What are the risks of confusing price with value?

Confusing price with value traps economic judgment in the visible number. Real value is tied to benefit, sustainability, and the ability to preserve purchasing power over time.

What gives money its economic value?

Money’s value does not come from its form alone, but from its ability to preserve benefit, enable exchange, and represent trust. Its value changes when scarcity, trust, or purchasing power changes.

How does scarcity in fiat and virtual money affect the economy?

Its effect appears in how costs, incentives, and resources are managed, and in the economy's ability to turn decisions into sustainable value. The direct context is fiat money and interest-based finance, arguing that virtual currencies may better preserve scarcity and serve as stores of wealth.