Saudi Arabian Bank Plans Sharia-Compliant Blockchain Products
Saudi Arabia’s Islamic Development Bank (IDB) is reportedly planning to use blockchain technology to develop sharia-compliant financial products.
Islamic banking or Islamic finance or sharia-compliant finance is banking or financing activity that complies with sharia (Islamic law) and its practical application through the development of Islamic economics.
The Jeddah-based Islamic Research and Training Institute, IDB’s research arm, is seeking to develop blockchain platforms to reach out to Muslim customers. The research outfit 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.
IDB said that blockchain features would allow for instantaneous clearing and settlement of transactions and asset exchanges, while helping eliminate counterparty risk.
IDB is a multilateral development financing institution located in Jeddah, Saudi Arabia. It was founded in 1973 by the finance ministers at the first organization of the Islamic Conference (now called the Organisation of Islamic Cooperation) with the support of the king of Saudi Arabia at the time (Faisal), and began its activities on 20 October 1975. The purpose of the bank is to foster the economic development and social progress of member countries and Muslim communities individually as well as jointly in accordance with the principles of Shari’ah i.e., Islamic Law.