Al Hilal Bank, based in Abu Dhabi, carried out a blockchain operation for an Islamic loan worth $ 500 million.
The bank, an investment arm of the government of Abu Dhabi, announced Monday that it liquidated the Islamic bond, compliant with Sharia, or sukuk, worth $ 500 million on the secondary market, using blockchain technology. The link is maturing in September 2023.
From a technological point of view, Jibrel Network, a fintech startup based in the UAE, has assisted the bank with the tools and infrastructure necessary to block the transaction.
The bank stated that it aims to transform the sukuk market using blockchain and integrating the technology into its infrastructure to release more digitized or "smart" sukuks for more efficient transactions and reduced overheads.
Al Hilal Bank CEO Alex Coelho said:
"We are proud to be the first bank to launch a" Smart Blockchain Islamic Sukuk. "The benefits of using smart contracts go from safer transactions with solid Shariah compliance, to unlocking new opportunities."
The bank also said that Islamic sukuks are one of the fastest growing asset classes, with a value of $ 97.9 billion in bonds issued in 2017 – a 50% increase from 2016.
Last month, even the Indonesian financial company Blossom Finance was looking for problem Bonds or sukuks compliant with Sharia on the blockchain to finance social projects.
The World Bank lifted up $ 81 million through its first blockchain-based bond in the summer.
Abu Dhabi image via Shutterstock