Blockchain is everywhere, disrupting it all. Islamic finance is also getting disrupted by the technology and some companies are quick to snap up the popular trend of deploying blockchain for business purposes and retaining customers.
R3, a blockchain enterprise vendor is one such company. It has recently entered a partnership with a startup based in the UAE to offer its services to the Islamic finance world.
The startup in questions is Wethaq, a platform-as-a-service company that will implement the Corda platform (R3’s product) to digitise the whole process of issuing Islamic bonds, from pre-sale to financing. The Islamic bonds also go by the name sukuk. As many other companies have hoped and done so, Wethaq aims to improve its efficiency, save costs and enable smoother and wider issuance of the financial instrument.
In 2018, Leaprate reported about Wethaq and the fact that it was the first Islamic capital platform that was based on the technology of blockchain. The platform has had great success in its launch and attracting investors, especially considering the fact that the Islamic capital market is much more complicated than traditional markets one. The reason for this is the exceptionally high operational costs, so any technology that is secure and can lower costs is more than welcome in Islamic finance.
Considering the fact that the Islamic capital market does not see many innovations in recent years, expansion of blockchain services and partnerships between blockchain enterprise companies and Islamic companies are all great news for the local financial market.