Abu Dhabi Bank Settles Sharia-Compliant Bonds On Blockchain Platform November 26, 2018 November 26, 2018 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Market NewsNovember 26, 2018 by Kelly Cromley

Abu Dhabi Bank Settles Sharia-Compliant Bonds On Blockchain Platform

Al Hilal Bank, based in Abu Dhabi, became the first ever Islamic bank to promote and settle an Islamic sukuk with blockchain know-how. The bank has joined forces with Jibrel Arrange, a UAE-based fintech company, for the venture, according to MENA Herald.

The bank offered and settled its $500 million Senior Sukuk (bond) maturing on the secondary market in September 2023 utilizing blockchain innovation. This is the first time a blockchain trade was performed to execute a Sukuk trade.

Al Hilal Bank’s CEO, Alex Coelho, said “We are proud to be the first bank to launch a Smart Blockchain Islamic Sukuk; 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.”

According to Investopedia, a sukuk is an Islamic budgetary certificate, comparative to a Western finance bond, which complies with Islamic religious law Sharia law. Islamic Sukuk is a fast developing asset class –Sukuks were offered for $97.9 billion in 2017, reflecting a 50% increment from 2016.

Al Hilal Bank employs blockchain innovation to overhaul the Sukuk market and clear the way for digitized Islamic Sukuks or “Smart Sukuks,” which can enhance transaction effectiveness and decrease the bloated overhead related with the promotion and settlement of Islamic Sukuks.

By leveraging smart contracts to ensure Sharia law compliance, the bank says it is sure that operational proficiency and mechanization benefits can be accomplished.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.