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Gold coins of Abd al-Malik (minted between 696 and 697 AD) from Damascus, Syria

Almost every day a news broadcaster tells us that the world has just suddenly changed. The hyperbole of 24-hour news coverage is littered with clichés: every day, it seems, the world is never going to be quite the same again. But there 'have' been moments in history when the world was indeed suddenly changed, and the people living at the time knew it.

"This was a new beginning." (Hugh Kennedy)

"I think it is a way of imagining not only the past but the future." (Professor Madawi al-Rasheed)

"What went on before wasn't really relevant, this was a new dispensation." (Hugh Kennedy)

This series is a history told through 'things', and this programme is about two coins - about what we would now call a currency change. But they're two coins that sum up one of the greatest political upheavals ever - the permanent transformation of the Middle East in the years following the death of the Prophet Muhammad. For Muslims, the clock of history was reset when, in 622 in the Christian calendar, Muhammad and his followers moved from Mecca to Medina. That event, the Hijra, became for Islam Year 1 of an entirely new calendar. For his followers, the prophet's teachings had so transformed society that time had begun again.

The objects we'll encounter this week will show something of what the world looked like at this particular moment. They were all made in the years around Muhammad's death in the year Hijra 11, 632 AD, and we're travelling to China and Mexico, England and Korea. Everywhere we'll be looking at the interaction of power and faith.

In the 50 years after the death of the Prophet, Arabian armies shattered the political status quo across the Middle East, conquering Egypt and Syria, Iraq and Iran. The power of Islam had spread as far in a few decades as Christianity and Buddhism had in as many centuries.

We're in Damascus in the mid-690s, and the inhabitants of the city all have a strong sense that their world is in transition. Still in appearance a Christian Roman metropolis, Damascus now is turning into the capital of a huge new Islamic empire. The head of this burgeoning empire, the caliph, is remote in his palace, and the Islamic armies are segregated in their barracks, but the people in the bazaars and streets of Damascus are about to have their new reality brought home to them in something they handle every day - money.

In the 690s, Damascus merchants might not have understood that their world had changed permanently. Despite decades of Islamic rule, they were still after all using the coins of their former rulers - the Christian Byzantine emperors - and those coins were full of Christian symbolism. It was quite reasonable to think that, sooner or later, the emperor would return to defeat his enemies, as he had several times before. But he did not. Damascus has remained a Muslim city to this day, and perhaps the most visible sign that this new Islamic regime was going to last, was the change in the coinage.

I want to talk about two coins. The man who issued them was Abd al-Malik, Ninth Caliph, Leader of the Faithful, to rule in succession to the Prophet Muhammad. Both coins were issued in Damascus within 12 months, across the Hijra years 76 and 77 - that is, 696 - 697 AD. They're both of gold, and they're the same size. But they're utterly different. One coin shows the Caliph. The other coin has no image at all, and this change reveals how Islam was defining itself as a political system in these critical early years.

I am in the Study Room of the Department of Coins and Medals of the British Museum, holding one of these new coins. It's bright gold, it's almost exactly the size of a British penny, and a little bit heavier. On the front, where a Byzantine coin would have had the emperor, it has a full-length figure of the Caliph, Abd al-Malik. And on the back, where the Byzantines would have put a cross, there is a column with a sphere at the top.

Al-Malik is shown full-figure, standing and bearded, wearing Arab robes and a Bedouin scarf headdress, with his hand resting on a sword at his waist. It's a fascinating image. It's a unique source for our knowledge of the dress and the regalia of the early caliphs, and it's probably the oldest known depiction of a Muslim. His pose is menacing, he looks as though he's about to draw his sword, and the lines below his waist are almost certainly meant to represent a whip. What we have is an image to inspire fear and respect, an image that makes it clear that the eastern Mediterranean now has a new faith, and a formidable new ruler. A letter from one of his governors echoes the image's implicit message:

"It is Abd al-Malik, the commander of believers, a man with no weaknesses, from whom rebels can expect no indulgence! On the one who defies him falls his whip!"

He cuts an impressive awe-inspiring figure - although a less reverential source tells us that he had such appalling halitosis, that he was nicknamed the "fly-killer". But, bad breath or not, Abd al-Malik was the most important Muslim leader since Muhammad himself, because he transformed what might have been merely a string of ephemeral conquests into an abiding state, a state that would survive in one form or another until the end of the First World War.

Abd al-Malik was a new breed of Islamic leader. He had no personal memory of Muhammad, and he shrewdly saw how best to exploit the administrative traditions of earlier empires - especially Rome and Byzantium - in order to establish his own, as Professor Hugh Kennedy, of the School of Oriental and African Studies, explains:

"In the years that followed the Prophet Muhammad's death in 632, the caliphs were essentially the political and religious leaders of the Muslim community. All Arab Muslims in the first century of Islam, realised that this was a new state - that what went on before wasn't really relevant. These caliphs were not the successors of the Byzantine emperors or of the Sassanian king of kings. They might look to these people for solutions to administrative problems - how you collect money, and indeed what sort of money you make - but they wouldn't see themselves as performing the same sort of role. This was a new dispensation."

One of the administrative solutions that Abd al-Malik borrowed from the Byzantine emperors was how to manage the currency. Up until now, the new Islamic empire had used hand-me-down coins from the pre-conquest era, or imported, and especially Byzantine, gold coins, but Abd al-Malik quickly saw what every chancellor of the exchequer has seen since, namely that there'll be economic instability if a ruler does not control the quantity and the quality of his own money supply. He understood that coins are literally the stamp of authority, asserting the dominant power in the society using them - and that power was now his.

It's worth remembering that in the pre-modern world, coinage was often the only mass-produced item in use, and it was therefore a hugely significant element in the visual culture of a society - money was a billboard for the boss. And so the boss, Abd al-Malik, was stamped on this first overtly Islamic coinage. The Leader of the Faithful had ousted and replaced the emperors of Byzantium. But something quite unexpected happened to those coins with Abd al-Malik standing on them. After a few years, they simply vanished. During the Hijra year 77 (697 AD), the Standing Caliph coin was suddenly replaced with a design that could hardly be more different. There's no caliph, there's no figure, only words. This is the defining moment for Islamic public art. From now on no human image would be used in such a public arena for well over a thousand years.

Back in the Coins and Medals department, I'm examining the reformed coin in more detail. It's exactly the same size and weight as the earlier coin, it's also made of solid gold, but it says that it was made in the year 77, so one year later than the previous coin. And now there's nothing to see but text. On the front it reads: "There is no god except God alone, he has no partner; Muhammad is the Messenger of God whom he sent with guidance and the religion of truth that he may make it victorious over every other religion." This is an adaptation of a text from the Qu'ran.

And on the back of the coin is another Qu'ranic text: "God is One, God is the Eternal. He begets not, neither is he begotten."

The inscriptions on this coin make, I think, two extraordinarily interesting points. Firstly, this is almost the oldest Qu'ranic text to have survived. Before Muhammad, Arabic was barely a written language at all, but now there was of course a vital need to record God's words accurately, and so the first developed Arabic script - the "kufic" script - was created. And it appears on this coin. But this coin also tells us something else. If coins reflect the dominant power in a society, it's clear that the dominant power in this empire is now not the emperor but the word of God. Portraiture or figurative art has no place in the official documents of such a state. The tradition of placing the ruler on the coin, familiar across the Middle East since the days of Alexander, had been decisively abandoned. And the text-only coin remained the norm in all Islamic states until the First World War. Arabic, the language of God, inscribed on an Islamic coinage, became a fundamental tool for the integration and survival of the first Islamic state.

Abd al-Malik, Khalifah Allah, Deputy of God, Ninth Caliph and Ruler of the Faithful, died in 705. But the message proclaimed on his coins of a universal empire of faith still resonates strongly. Today there is no caliph - long claimed by the Turkish sultans, the office was abolished in 1924. In fact, a universally accepted caliph has always been a rare thing, but the dream of a single Islamic empire - a caliphate - remains potent in the modern Islamic world. We asked the social anthropologist Professor Madawi al-Rasheed to comment:

"Muslims today, at least some sections of the Muslim community worldwide, aspire to this ideal of the caliphate as the embodiment of the Muslim community. It is related to the spread of the internet, of new communication technology, that allows Muslims from different backgrounds to imagine some kind of relationship with other Muslims, regardless of their culture, language or ethnic group. So among your second-generation Muslims in Britain, let's say, they have lost the cultural background of their parents, and they have actually developed linkages with other Muslims of their age, who may have come from different parts of the Muslim world. It aspires towards a globalised identity, an identity where you have bonds based on belief, rather than ethnic background or even nationality."

The yearning for one Islamic community, inspired and guided by the word of God alone - that dream, first clearly articulated in physical form on the coin struck in Damascus over 1,300 years ago - is clearly still very much alive.