x

Abu Dhabi, UAEWednesday 19 September 2018

Saudi Arabia's IDB plans blockchain-based banking products

The financial institution will use blockchain technology to develop Islamic banking products as it looks to tap demand from Muslim investors

Islamic development Bank's move is the latest effort from financial firms to combine blockchain technology with products suitable for Muslims. Issoue Sanogo / AFP
Islamic development Bank's move is the latest effort from financial firms to combine blockchain technology with products suitable for Muslims. Issoue Sanogo / AFP

The research arm of the Islamic Development Bank plans to use blockchain technology to develop sharia-compliant products, aiming to support financial inclusion efforts across its member countries.

The Jeddah-based Islamic Research and Training Institute said it had signed an agreement with local firm Ateon and Belgium-based SettleMint, with the first stage to focus on a technical feasibility study.

The agreement is the latest effort to combine blockchain technology to tap demand from Muslim investors, with firms from Indonesia to Canada having already received sharia-compliant certification for their products.

________

Read more:

Blockchain and cryptocurrencies herald the demise of traditional banking

Goldman Sachs mulls cryptocurrency services

A golden crypto currency you can invest in for as little as $45

________

Involvement of the IDB, a multilateral development institution, could also encourage other fintech firms to incorporate Islamic finance to tap markets across the Middle East, Asia and Africa.

Islamic finance follows religious principles such as a ban on gambling and outright speculation, but until now the sector has focused on traditional retail banking services.

Blockchain involves a shared electronic ledger that allows all parties to track information through a secure network, removing the need for third-party verification.

The IDB said such features would allow for instantaneous clearing and settlement of transactions and asset exchanges, while helping eliminate counterparty risk.

RELATED ARTICLES
Recommended