THELOGICALINDIAN - Islamic banking institutions are more application blockchain technology for circuitous costs agreement Shariahcompliant affairs and Islamic and shariacompliant alternatives to accepted allowance Blockchain can abetment in KYC backoffice automation and underwriting of microinsurance
Several Islamic Financial Institutions are Trying Blockchain
Emirates Islamic was the aboriginal Islamic coffer to analysis blockchain. It is allotment of the UAE’s Emirates NBD cyberbanking group. As aboriginal as 2017 the coffer integrated the technology into cheque-based acquittal processes. This adequate their actuality and minimized the abeyant for fraud.
The UAE-based Al Hilal Bank became the world’s aboriginal Islamic Bank to complete a sukuk transaction on the blockchain on the Abu Dhabi Global Market Banking center. A sukuk is an Islamic banking certificate, affectionate of like a band in Western finance, that complies with Sharia-Islamic religious law.
Based on the Ethereum blockchain, the arrangement was developed by Dubai-incubated fintech startup Jibrel Network. This aggregation provides currencies, equities, commodities, and added banking assets as accepted ERC-20 tokens on the Ethereum blockchain.
“We are appreciative to be the aboriginal coffer to barrage a ‘smart blockchain Islamic sukuk’,” said Alex Coelho, CEO of Al Hilal Bank. He accent blockchain’s “cost efficiency, able-bodied Shariah-compliance and the unlocking of new opportunities.”
The Islamic Corp for the Development of Private Sector (ICD) aboriginal cooperated with cryptocurrency startups on acute affairs and added blockchain-based innovations for Islamic Finance.
An ICD partner, iFinTech Solution, based in Tunis, is developing blockchain articles to break clamminess administration challenges and article affairs in Islamic finance, including interbanking relations amid accepted and Islamic banks to ensure Shariah-compliance.
“Information technology will consistently comedy an important role in the banking system,” said ICD’s new CEO Ayman Sejiny.
The IDB’s Islamic Research and Training Institute, furthermore, is alive with fintech firms Ateon from Riyadh and SettleMint from Dubai on blockchain-based acute affairs in adjustment to actualize Shariah-compliant banking products. The abstraction is to automate the absolute acknowledged action for Islamic accounts institutions.
Startups accustomed to action Shariah-compliant banking articles accommodate the Dubai-based Blockchain startups accommodate OneGram, Malaysia’s HelloGold, and Islamic microfinance close Blossom Finance from Indonesia.
Certification on the blockchain ability accomplish halal certifications simpler. POCertify is a new dApp on the blockchain. It uses acute affairs technology to broadcast Halal certificates. Halal is the Arabic chat for permissible, and, in this case, is mostly refers to food. Aliment classified as halal has to be certified in agreement of several Islamic guidelines.
“Blockchain technology, calm with Islamic principles, will digitally encrypt the Halal Certificate in its PDF format, and verify the Halal Certificate on the blockchain,” explains architect Shabeer Shaik Abdurahaman, who specializes in Islamic fintech.
How Is Blockchain Being Used?
Beyond aliment certification, Islamic banking institutions are application blockchain for the afterward reasons:
Blockchain may additionally be acclimated in cyberbanking and affairs through smartphone apps while advancement traceability and accuracy of cyberbanking deals for retail clients.
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