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Abu Dhabi Bank Settles Islamic Bond On Blockchain
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[Image: Blockchain-e1534518105344.jpg]
Al Hilal Bank has become the first Islamic bank in the world to use the blockchain to settle an Islamic bond worth $500 million. This is according an announcement made by on Nov.26. The bank is an investment arm of the Abu Dhabi government.

Al Hilal Aims To Transform The Islamic Bond Market By Embracing The Blockchain

The distributed ledger technology was used to transact a secondary market deal worth $500 million. The bond will mature in September 2023. The transaction marked the first time the blockchain has been used to execute a Shariah-compliant bond around the globe.

The report goes on to state that Islamic bonds are becoming more successful and they are one of the fastest growing asset classes.  In 2017, bonds worth $97.9 billion were issued — a figure that represents a 50 percent increase from 2016.

By embracing the distributed ledger technology, Al Hilal Bank hopes to transform the Islamic bond market by integrating them into their infrastructure. They hope this will pave the way for innovative digitized Islamic bonds (which they have dubbed smart bonds).

The transaction was possible thanks to Jibrel Network, a fintech startup that is based in the UAE. It assisted the bank with the necessary DLT tools and infrastructure to facilitate the bond.  Additionally, the collaboration between the startup and the bank was possible thanks to the support of the Abu Dhabi Global Markets’ (ADGM).

Commenting on the historic event, Alex Coelho, the CEO of Al Hilal Bank said:

“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.”

by Basil Kimathi

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