Abu Dhabi financial center unveils tie-up to develop blockchain sukuk transactions
Abu Dhabi Global Market (ADGM) announced that it has partnered Al Hilal Bank and fintech firm Jibrel Network with the aim of developing and testing blockchain-based sukuk transactions in its Regulatory Lab.
A sukuk refers to an Islamic financial certificate that is Sharia-compliant, or complies with Islamic religious law. A sukuk is very similar to a bond in Western finance.
The Abu Dhabi-based Al Hilal Bank, along with Jibrel Network, successfully piloted the first Shariah-compliant purchase and settlement of a sukuk transaction using blockchain. This partnership was forged via the Plug and Play ADGM innovation platform, which allows startups to partner with big tech companies and banks.
“…the advantages of using smart contracts range from cost efficiency, robust Shariah compliance, to the unlocking of new opportunities,” Al Hilal Bank CEO Alex Coelho said regarding how blockchain can revolutionize the Islamic financial sector.
“…we will be able to provide Islamic Financiers with the necessary tools to facilitate Islamic agreements with the same speed, volume and efficiency experienced in conventional finance, and potentially develop new digital asset classes that were previously unimaginable,” said Jibrel co-Founder Talal Tabbaa.
Additionally, Jibrel Network and Al Hilal Bank will work towards ramping up the adoption of distributed ledger technology (DLT) for the Islamic Finance sector, under the purview of the Financial Services Regulatory Authority (FSRA).
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