The Ali Hilal Bank from Abu Dhabi(UAE) has reportedly executed its first blockchain based transaction for Islamic Sukuk (aka Islamic Bonds). As per local media reports, the bank made a secondary market deal worth $500 Million USD for Islamic bond and will be maturing on September 2023.
The transaction was conducted with the help of Jibrel Network, a UAE-based fin-tech startup, and provided the necessary blockchain tools, infrastructure to facilitate the process.
The Jibrel Co-Founder, Talal Tabbaa, stated that,
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.
The bank is happy to embrace the trending blockchain technology to digitize and transform the way Islamic bonds to be executed. Thus paving a new and innovative way for more efficient transactions and reduced overhead costs.
The fact that blockchain provides a safe and secure way to transact almost anything is been leveraged by the Abu Dhabi Bank. On the same lines, Al Hilal Bank’s CEO, Alex Coelho quoted that,
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.
Furthermore, the bank also mentioned that Islamic sukuks are one of the fastest growing asset classes, with $97.9 billion worth of the bonds being issued in 2017, almost up to 50% increase from 2016.
Also, as the blockchain is decentralized in nature, it will help in eliminating the third party systems involved while issuing the bonds.
Talking of bonds, the World Bank has also raised $81 million through its first blockchain-based bond in the summer.
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