R3 targets Islamic finance
Enterprise blockchain vendor R3 has partnered with a Dubai-based startup in an attempt to target the growing market for Islamic finance.
The collaboration wlll see platform-as-a-service provider Wethaq use R3’s Corda platform to try and digitise the pre-sale issuance, management and financing of Islamic bonds, also known as sukuk. By doing so, Wethaq hopes to decrease the cost and time of issuance and enable wider distribution.
The sukuk market has gained global popularity in recent years and issuance is set to be in excess of $115 billion this year, according to rating agency 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.”
Interest in using blockchain technology for Islamic finance has also 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.