During the lifetime of the Prophet Muhammad and the early years of the Muslim community, Arabia did not yet produce its own coins. Instead, people used currency from the surrounding empires. Gold and bronze coins mostly came from the Byzantine Empire, while silver coins were imported from the Sasanian Empire. Early Muslims relied on these coins for everyday transactions, as they were already established and trusted forms of currency.
It wasn't until the time of the third caliph, 'Uthman ibn 'Affan, a close companion of the Prophet, that the first distinctly Islamic coins were minted. Following the Muslim conquest of the Sasanian Empire, and with the collapse of its political and monetary systems, the need arose to produce a stable and recognizable currency under Muslim authority.
The earliest Islamic coins were modeled almost exactly after Sasanian drachms, particularly those struck during the reign of Yazdigerd III, the last Sasanian ruler. These coins retained much of the original imagery, including the portrait of the king on the front and the fire altar flanked by attendants on the back. They were still inscribed entirely in Pahlavi, the script used for Middle Persian. On the obverse, the name of Yazdigerd appears to the right of his image, and the phrase "may his glory grow" to the left. The reverse shows the fire altar, a central symbol of Zoroastrianism, with abbreviations indicating the mint and regnal year.
The following is a Sasanian drachm from the reign of Yazdigerd III:
The first Islamic adaptation of this design introduced subtle changes. While keeping the overall Sasanian appearance, Muslim minters added Arabic words or phrases in the margin, such as the basmala ("bism Allah" - in the name of God). These additions were often written in simple, early Arabic script. Other examples bear inscriptions like jayyid (good) or even the full Islamic declaration of faith (la ilaha illa Allah, Muhammad rasul Allah) in later Umayyad issues:
These coins continued to feature Pahlavi inscriptions for the mint and date. In the case of this dirham attributed to the time of Caliph 'Uthman, the mint is identified as Sijistan, abbreviated "SK" in Pahlavi. The date given-regnal year 20-corresponds to the end of AH 30 and most of AH 31 in the Islamic calendar.
The Arab-Sasanian style remained in use for several decades, surviving through the Rashidun caliphate, the Umayyads, the rival Zubayrids, rebel factions like the Kharijites, and other contenders for power. Even after the major coinage reform of AH 77, which introduced fully Islamic designs free of Byzantine and Sasanian influence, some regions continued to issue coins in the older style.
