Many advocates of Islamic banking suggest using gold as a replacement for the money created through the interest rate mechanism. This is an interesting proposition, especially in the context of Malaysia where the state of Kelantan has already started using gold and silver coins as a potential replacement for the federally issued legal tender of currency notes and coins.
It is important to assess its economic implications with respect to growth and overall economic activity in the country. Americans find it difficult, and painful, to revert to the gold standard for reasons peculiar to the US economy, but these limitations are not relevant to Malaysia………………………………………..Full Article: Source