The Concept of Money in Islamic Economics
The concept of money in Islamic economics is very different from the concept of money in conventional economics. In Islamic economics the concept of money is very clear and firm that money is money, not capital.
In the Islamic economic concept, money belongs to the community (money is public goods). Whoever hoards money or is left unproductive means reducing the amount of money in circulation which can result in the economy not running. The implication is that the process of exchange in the economy is hampered.
Besides that, the accumulation of money/assets can also encourage people to tend to bad traits such as greed, greed, and laziness to do charity (zakat, infaq, sadaqah). These unfavorable qualities have an adverse impact on economic viability. Therefore Islam prohibits the accumulation / hoarding of wealth, monopolizing wealth.
Another difference is that in Islamic economics, money is something that is a flow concept and capital is something that is a stock concept, whereas in conventional economics there are several meanings.
Cash payment instruments use more currency (cash), namely paper money and coins. Currency (cash) still plays an important role especially for small transactions. In today's modern society, the use of cash payment instruments such as currency (cash) tends to be smaller than demand deposits. In 2005, the ratio of currency (cash) to the money supply was 43.3 percent. However, it should be noted that the use of currency (cash) has constraints in terms of efficiency.25 This can happen because the cost of procurement and management (cash handling) is relatively expensive. That's not to mention inefficiencies in payment timing. For example,
when you wait to make a payment at the payment counter which takes a relatively long time because of the long queue. Meanwhile, transactions in large amounts carry risks such as theft, robbery and counterfeiting of money.
Recognizing the inconvenience and inefficiency of using currency (cash), BI has taken the initiative and will continue to push to build a society that is accustomed to using non-cash payment instruments or the Less Cash Society (LCS).