Al Hilal Bank aspires to bring a transformation in the Sukuk market with the help of blockchain-based transaction. Recently, the bank successfully executed the first Sukuk transaction of the world using blockchain technology. The bank used the technology for reselling and settling an Islamic Sukuk.
The Islamic bank used blockchain for transacting a secondary market deal for its $500 million senior Sukuk that will mature in September 2023. According to reports, the Islamic Sukuks are one of the most successful and fastest growing asset classes in recent times. The bank issued $97.9 billion work of Sukuks in 2017 indicating a 50 percent rise from the previous year.
According to the CEO of Al Hilal Bank, Alex Coelho, “Once again, the bank has demonstrated that it has the capabilities of leading in the competitive market of Islamic banking. The advantages of using smart contracts range from safer transactions with robust Shariah compliance to the unlocking of new opportunities.”
Coelho further added that the bank is the first to conduct the blockchain-based transaction in the Sukuk market and launch a “Smart Blockchain Islamic Sukuk.” The launch has been made possible due to the collaboration between the Al Hilal Bank digital transformation team and a UAE-based Fintech Jibrel Network. The collaboration received support from Abu Dhabi Global Markets (ADGM) Fintech platforms, reported Khaleej Times.
The CEO of ADGM, Richard Teng said that his platform is proud to play a key role in the development of this ecosystem for the providers of cutting-edge technology so that collaboration with the local financial institutions can become possible for delivering value across the financial markets in the country. He further added that they are looking forward to providing support to Jibrel and Al Hilal Bank in the RegLab so that solutions transforming the Islamic finance sector can be built.
Prior to the blockchain-based transaction, X8 AG, a Swiss startup received an Islamic financial certification for its Ethereum-based stablecoin from the Shariyah Review Bureau (SRB), reported Cointelegraph.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]