The group made the announcement Thursday. They aim to stay away from the "tyrant's financial system."
ISIS said in a statement that it would explain more at a later date including the new currency's exchange rate, and where it can be found. The currency will include seven coins: two gold, three silver and two copper.
The move is "purely dedicated to God" and will remove Muslims from the "global economic system that is based on satanic usury," ISIS said. Usury is an illegal action or practice of lending money at unreasonably high rates of interest.
Where does ISIS get its money? Jimmy Gurule, a former U.S. Treasury undersecretary, told CNN's "The Lead with Jake Tapper" that its funding comes from oil, ransom payments, taxes and the sale of stolen artifacts.
He added: "The difficulty, of course, with that kind of money is you can't just put that money in shoe boxes and place it under your mattress. It has to enter into the financial system at some point in time. So I think the Treasury needs to be focusing on banks -- banks in Qatar for example, and in Kuwait -- that may be the recipients and handling money for ISIS."