Abu Dhabi:Al Hilal Bank is the first Islamic bank in the world to leverage Blockchain technology for the resale and settlement of an Islamic Sukuk. Blockchain was used to transact a secondary market deal in Al Hilal Bank’s USD500m Senior Sukuk maturing in September 2023. This was the first time that Blockchain has been used worldwide to execute a Sukuk transaction.
Islamic Sukuk have been successful and one of the fastest growing asset classes with US$97.9 billion worth of Sukuks issued in 2017 (representing a 50% increase from 2016).
Al Hilal Bank is aiming to transform the Sukuk market through embracing Blockchain and integrating it into their infrastructure, paving the way for innovative digitized Islamic Sukuks, (which have been dubbed “Smart Sukuks”).
Al Hilal Bank’s CEO, Alex Coelho, commented on the initiative: “We are proud to be the first bank to launch a ‘Smart Blockchain Islamic Sukuk; once again the bank has demonstrated that it has the capabilities of leading in the competitive market of Islamic banking. The advantages of using smart contracts range from safer transactions with robust Shariah compliance, to the unlocking of new opportunities. The partnership between Al Hilal Bank and UAE incubated startup, Jibrel, highlights ADGM’s success in attracting, nurturing and fostering innovation.”
The initiative is the result of the collaboration of Al Hilal Bank Digital Transformation team with Jibrel Network, a UAE-based FinTech. The collaboration was made possible thanks to the support of Abu Dhabi Global Markets’ (ADGM) FinTech platforms that foster an interactive, collaborative and vibrant ecosystem for innovation to take root in Abu Dhabi and the region.
ADGM CEO, Richard Teng: “As an international financial centre and FinTech thought leader, ADGM is proud to play an instrumental role in fostering an ecosystem for cutting-edge technology providers to collaborate with innovative local financial institutions in delivering value across financial markets. We look forward to supporting Al Hilal Bank and Jibrel in the RegLab to build solutions that will bolster and transform the Islamic finance sector.”
Jibrel Co-Founder, Talal Tabbaa, highlighted the success of the initiative, saying, “We are firm believers that by combining Jibrel’s tried and tested smart contract solutions with the world class industry expertise held by Al Hilal Bank’s Digital Transformation Team, we will be able to provide Islamic financiers with the necessary tools to facilitate Islamic agreements with the same speed, volume and efficiency experienced in conventional finance, and potentially develop new digital asset classes that were previously unimaginable.”
Smart Sukuks will provide transactional efficiencies and significantly reduce the bloated overheads associated with issuing and settling Islamic Sukuks. In addition, by leveraging smart contracts to oversee the enforcement of Shariah compliance, Al Hilal Bank is confident that operational efficiencies and automation benefits can be delivered.
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About Al Hilal Bank
Established in 2007, Al Hilal Bank is a progressive Islamic bank headquartered in Abu Dhabi (UAE) offering a wide range of client-centric Shariah compliant Wholesale Banking, Retail Banking, Treasury and Wealth Management. The bank is 100% owned by the Government of Abu Dhabi, through the Abu Dhabi Investment Council (ADIC), with issued and paid up capital of AED3.5 billion. The Bank enjoys strong long-term credit ratings of A+ and A2 by Fitch and Moody’s respectively. The Bank has 17 retail branches across the UAE and 3 branches in Kazakhstan offering digital-based services to enhance the Bank’s performance-driven culture. Al Hilal Bank has been recognized as the Safest Islamic Financial Institution in the GCC by Global Finance in 2016 and in 2017.
About ADGM
Abu Dhabi Global Market (ADGM), an international financial Centre (IFC) located in the capital city of the United Arab Emirates, opened for business on 21 October 2015. Established by UAE Federal Decree as a broad-based financial Centre, ADGM augments Abu Dhabi’s position as a global hub for business and finance and serves as a strategic link between the growing economies of the Middle East, Africa and South Asia and the rest of the world.
ADGM’s strategy is anchored by Abu Dhabi’s key strengths including private banking, wealth management, asset management and financial innovation. Comprising three independent authorities: ADGM Courts, the Financial Services Regulatory Authority and the Registration Authority, ADGM as IFC governs Al Maryah Island, which is a designated financial free zone. It enables registered financial institutions, companies and entities to operate, innovate and succeed within an international regulatory framework based on Common Law. Since its inception, ADGM has been awarded the “Financial Centre of the Year (MENA)” for two consecutive years for its initiatives and contributions to the financial and capital markets industry in the region.
About Jibrel Network
Jibrel is a software development company specializing in developing Blockchain and smart contract solutions for leading banks, governments and regulators focused on digitizing financial assets. Jibrel is headquartered in Zug, Switzerland with offices in New York, Russia and an on-shore entity in Dubai, UAE.
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