announcement on Monday. Using blockchain technology, it has settled the Islamic, shariah-compliant bond, or sukuk, worth $500 million on the secondary market. The bond is maturing in September 2023.
Aim at transforming the sukuk market using the blockchain, the bank plans to integrate the tech into its infrastructure, so as to issue more digitized or “smart” sukuks for more efficient transactions and reduced overhead costs. Al Hilal Bank’s CEO, Alex Coelho, said:
“We are proud to be the first bank to launch a ‘Smart Blockchain Islamic Sukuk’. The advantages of using smart contracts range from safer transactions with robust Shariah compliance, to the unlocking of new opportunities.”
Furthermore, the bank noted that the Islamic sukuks are one of the fastest growing asset classes, a 50% increase has been observed from 2016, as $97.9 billion worth of the bonds being issued in 2017.