Partnership Between Wethaq And R3 To Streamline Sukuk Bond Trading
Scroll DownOn August 28, it was announced that Wethaq, which is a fintech company based in Dubai, was partnering with R3, which develops enterprise software. They will be creating a Shariah-compliant platform for the issuing and trading of a type of financial certificate known as a sukuk. The new platform is reportedly based on another platform R3 has created called Corda.
As sukuk bonds must fully comply with Islamic Shariah law, their issuance and the trading of them is heavily regulated, which means that processing them is very time consuming. Wethaq hopes to both streamline and automate these processes through the platform that they are developing.
Sukuk securities are in many ways similar to bonds. But instead of representing a debt obligation on behalf of those who are issuing them, the holders of sukuk securities receive partial ownership of an asset. This means that holders of sukuk securities receive no guarantee that they will maintain the principal of their investment.
David Rutter, who is the CEO of R3, says that his company's Corda platform could modernize many of the economies of countries in the Middle East, particularly the economy of Saudi Arabia.
Mohammed Alsehli, who is the CEO of Wethaq, also commented on the announced partnership. He said that both companies are focused on developing a world-class financial infrastructure in both Saudi Arabia and UAE and doing so in pursuant to both countries' stated vision in regards to fintech. He added that they hoped one day to expand their efforts throughout not just the Middle East but also Southeast Asia.
Sharia compliance is an important issue for fintech companies. In July of last year, Stellar reportedly received the first Sharia compliance certificate for a distributed ledger protocol. The Shariah Review Bureau, which is affiliated with the Central Bank of Bahrain, approved the company's practices.
Also, the World Sharia Advisory Committee presented the digital currency NOORCOIN with a Shariah compliance certificate in March 2018. Upon announcement of this, NOORCOIN called itself "the first Sharia-compliant utility token."
Comments