Today Abu Dhabi’s Al Hilal Bank executed a sukuk transaction using blockchain. A sukuk is an Islamic bond that doesn’t pay interest and hence complies with Islamic law. Instead, sukuks usually involve financing assets where the bondholder has an ownership interest and receives a portion of the revenue.
Al Hilal Bank issued a $500m 5-year sukuk in September. The blockchain transaction involved a secondary market sale and settlement of $1m of the sukuk to a private investor.
Reuters reported that fintech Jibrel Network was involved in the deal.
Numerous banks have executed pilot loan and bond transactions. The benefits are transparency between parties, ease of oversight by regulators, and the potential for instant settlement.
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