According to a Reuters report today, UAE- based Al Hilal Bank has successfully executed “the world’s first sukuk transaction” using blockchain technology.
Sukuk is a form of a financial instrument used primarily in the Islamic world. This Sharia-compliant bond gives the opportunity to investors to profit with variable returns. Fixed interest is prohibited in Islam and thus, regular instruments are not viable for practicing Muslims.
According to the details of the Reuters report, Al Hilal used blockchain “to sell and settle in the secondary market a small portion of its USD 500 million five-year sukuk“ and through this effort, “Al Hilal Bank is aiming to transform the sukuk market through embracing blockchain and integrating it into their infrastructure, paving the way for innovative digitized Islamic sukuk.”
The deal, as informed by a spokeswoman of Al Hilal Bank, was valued at USD 1 million and was done with the help of Jibrel Network, a Switzerland-based fintech company.
The current year has seen the rise of many Sharia-compliant platforms as the industry gives a serious consideration for the largely unexplored Muslim market. With the followers of Islam making up a quarter of the world’s population, Sharia compliance opens up a whole new market is a major boost in businesses.
The start of November has already seen X8 AG, a Swiss startup receiving a Sharia-compliant certification by the Shariyah Review Bureau in connection with their Ethereum-based stablecoin.
The Bureau has also released a set of proposal to Stellar on how to deploy their transactional platform in financial institutions that work under the Sharia code. As such, the decentralized platform for distributed payments is the first DLT protocol that has been certified by the bureau.
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