Blockchain firm R3 has partnered with Wethaq, a Dubai-based startup, in an initiative designed to bring blockchain technology to the Islamic finance market.
The sukuk market has gained global popularity and issuance is set to emulate 2018 levels in excess of $115 billion, according to S&P. It is also rife with manual processes and therefore ripe for digitisation via distributed ledger technology, said R3 chief executive David Rutter.
“Blockchain is driving an unprecedented period of innovation across capital markets, with more assets moving towards complete digitisation.”
Wethaq’s platform-as-a-service offering will use R3’s Corda enterprise blockchain infrastructure to digitise the pre-sale issuance, management and financing of sukuk securities – a move it hopes will decrease the cost and time of issuance and enable wider distribution.
Interest in using blockchain technology for Islamic finance has increased in the last 12 months. Abu Dhabi-based Al Hilal Bank claimed to be the first firm to execute a sukuk transaction via the blockchain back in November 2018.
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