Al Hilal Bank of Abu Dhabi in the United Arab Emirates (UAE) has announced that they have completed “the world’s first Sukuk transaction” by using blockchain technology, as per the report from Reuters on November 26.
Sukuk, a legal apparatus which is also known as “sharia compliant” bonds, enables investors to generate returns without outstepping the Islamic laws.
The report notes that the bank has used blockchain technology to “to sell and settle in the secondary market a small portion of its $500 million five-year Sukuk,” mentioning, “Al Hilal Bank is aiming to transform the Sukuk market through embracing blockchain and integrating it into their infrastructure, paving the way for innovative digitized Islamic Sukuk.”
As per the spokeswoman of the Al Hilal Bank, the deal was worth $1 million, sold from the bank to a private investor. The report of Reuters adds that Jibrel Network, a Swiss fintech company, which has a office in Dubai, also participated in that transaction.
This month earlier, X8 AG, a Swiss startup received an Islamic financial certification from the Shariyah Review Bureau (SRB) for its stable coin, based on Ethereum’s blockchain.
Shariyah Review Bureau also issued guidance for Stellar, a open-source distributed system of payments, to provide their technology to the Islamic financial institutions. Stellar claims itself to be the first platform of its kind to get a sharia compliance certificate.
The issue around cryptocurrency is a bit of a trick one under the Islamic laws which are finding its feet as the technology evolves.