Al Hilal Bank which is based in Abu Dhabi has just completed a record transaction on Blockchain. The Blockchain transaction was for an Islamic bond and it was worth around $500 million. The announcement which stated the that the bond is settled, came last week. Al Hilal is one of the strongest investment branches of the Abu Dhabi government.
The shariah-compliant bond which is called sukuk, is worth $500 million and was settled on the secondary market via blockchain technology. The bond is expected to mature in September 2023. All technical assistance was provided by Jibrel Network. The fintech startup is based in UAE and aided the bank with all of the required blockchain tools and infrastructure needed for the completion of the record transaction.
Abu Dhabi is pushing for innovation
Al Hilal shared its intentions to transform the sukuk market via Blockchain technology. The bank intends to integrate the technology into its infrastructure to issue the so called “smart sukuks.” This will help with transaction speed and security as well as reduce the costs.
Alex Coelho, the CEO of Al Hilal, said:
“We are extremely proud to be the first bank to launch a “Smart Blockchain Islamic Sukuk”. Smart contracts have many advantages, starting from more secure transactions with robust Shariah compliance, to many new opportunities which are yet to be unlocked.”
Al Hilal stated that Islamic sukuks are growing rapidly. In fact, they are one of the fastest growing asset classes, with $97.9 billion worth of bonds being issued last year alone. This is a 50% increase from 2016. Just last month, Blossom Finance was also looking to issue Sharia-compliant bonds on Blockchain to fund many social projects. The Indonesian financial firm stated that it will without a doubt make use of this rapidly evolving and unique asset class.
The World Bank, also managed to raise $81 million through its first blockchain-based bond earlier this year.