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Abu Dhabi Bank reports 'first' Blockchain based transaction of 'Sharia-compliant bonds'

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  • Islamic Finance
  • 1 month ago
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Abu Dhabi's Al Hilal Bank has announced it has completed “the world’s first sukuk transaction” using blockchain technology.

Sukuk is a legal instrument also known as “sharia compliant” bonds, enables investors to generate returns without infringing on Islamic law.

Al Hilal Bank has used the distributed ledger technology (DLT) to “to sell and settle in the secondary market a small portion of its $500 million five-year sukuk,” adding: “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.”

According to a spokeswoman for the bank, the deal was worth $1 million, sold by Al Hilal to a private investor although it has been also reported that Swiss-based fintech company Jibrel Network, with offices in Dubai, participated in the transaction.

Earlier this month, a Swiss startup named X8 AG, received an Islamic financial certification from the Shariyah Review Bureau (SRB) for the company’s Ethereum-based stablecoin.

Back this summer, the Shariyah Review Bureau released guidance for Stellar, an open-source platform for distributed payments, to deploy their technology in Islamic financial institutions.

Stellar has claimed to be the first distributed ledger protocol to obtain sharia compliance certification.

Also during the spring an Indonesian fintech startup published a report titled, “Is Bitcoin Halal or Haram: A Sharia Analysis,” concluding that Bitcoin (BTC) is “generally permissible” under sharia law, potentially opening the doors to other startups to enter a market which until recently was an unknown field.

 

 

 

 

 

 

Source: Smart Trend Team/Cointelegraph