then, today, most of the money we have is just debit balances, data points with banks. while there actually is no physical form, there is value, which we denominate in our currency. so, what is really the true nature of money? is it the physical manifestation in the form of physical coins of gold and silver, dinar or dirham, or is it more than this? in today's digital world, it is obvious we can have money without any physical form. while we no longer require a physical form, what we do require is a system to record these debits, credits and transfers of money, which, essentially, is the financial system. 4 / 6 bis - central bankers'speeches from this perspective, some are of the view that money is transferable credit and another form of social technology to measure, attach value, organise and facilitate social and economic exchanges. this runs counter to much of contemporary economic thinking, which has its roots in money originating as a commodity that overcame barter trade. this latter thinking also underpins much of conventional or traditional economic theory that separates financial and real economics. at its extreme, neo - classical economics asserts that the financial system doesn't matter. money is irrelevant. it gives one to think of the shariah perspective ;'money'is not a commodity to be used to generate surplus value or profit in and of itself. for profits to be justifiable, a person must either bear ownership or investment risk, be liable to perform a duty or provide a service3. it is thus understood that money and profit generation must be rooted in real economic activities. but again, we circle to another conundrum : that if the financial system is irrelevant to the real economy, how do we tie'money'to the real economy, like we must do for islamic finance? ladies and gentlemen, i am posing a lot of questions. to me, these are relevant questions and areas of research to pursue to truly understand the real economic and financial system. in islamic finance and islamic economics, we have the alternative to pursue these based on fundamental islamic perspectives and move away from traditional economic thinking. we can do away with the concept of the economic man, the greedy, selfserving superhuman who strives to meet his unlimited wants in an environment of resource scarcity. instead, we should replace this with guidance : a nobleman, fairly moderate, charitable, who can be satisfied at some point, operating in a

the efficacy of islamic money markets in malaysia, which would also enhance our value proposition as an islamic financial marketplace. distinguished guests, building a financial, monetary, and economic system that embodies shariah virtues the second priority encourages a reimagining of the financial ecosystem for islamic finance. the prevailing monetary system, which is deeply ingrained as the basis for modern banking, has facilitated credit expansion and resource allocation that catalysed decades, even centuries, of economic advancement. it is a system within which the islamic financial system currently operates, not just in malaysia but worldwide. time and again, critiques of the current monetary system have contested the limits of such a system as the bedrock for islamic finance and highlighted the inherent features that may not be compatible with the virtues of islamic economics and shariah. yet, developing a feasible alternative system is not a simple feat. the growing significance of islamic finance in malaysia is already prompting us to ask several key questions : if we continue with the current trajectory, it is possible for the size of islamic finance to overtake conventional finance? how might a dominant islamic financial system look like and operate? currently, both systems somewhat compete, and hence, profit rates are influenced by interest rates. would this be the other way around if this were to happen, and what would be the implications for the financial markets and the sector? how would this development shape future monetary policy mechanisms, tools, and decisions? some are of the view that an islamic monetary policy, if any, should be a quantitative monetary policy, where the central bank influences the amount of money in circulation and money creation and leaves the determination of profit rates to the market. this could be rather a simplistic take for a few reasons. firstly, we know the experience of past central banks in advanced economies of trying to manage the money supply. it was dismal. perhaps things have changed by now, and we have a better understanding of the behaviour of money supply and demand. perhaps. 3 / 6 bis - central bankers'speeches secondly, would we be as effective to achieve our outcomes on inflation and growth? interest rates are a blunt but direct and impactful tool. money supply and credit creation are not. thirdly, and beyond the questions surrounding efficacy, what is really the ideal financial, monetary, and economic system? in islamic finance, we are quite clear on what such a system is to deliver. one that embodies the fundamental principles of shariah that advocates and achieve