Fintech Firm Partners With R3 to Develop Shariah-Compliant Market Platform

Dubai-based fintech company Wethaq has entered into a strategic partnership with enterprise software firm R3, in order to create a platform for issuing and trading sukuk securities based on R3’s Corda offering.

According to a press release on Aug. 28, Wethaq’s platform is built on R3’s open source enterprise blockchain platform Corda, and the company has been taking steps to ensure that it is likewise compliant with Sharia Law.

Wethaq’s platform is reportedly designed to improve the market infrastructure for issuing and trading sukuk securities. Sukuk is heavily regulated and demands a considerable amount of time for issuance. Wethaq hopes to automate and streamline this process, as well as the entire sukuk lifecycle, per the announcement.

Sukuk is a type of financial certificate similar to a bond that complies with Islamic Sharia Law. Sukuks differ from traditional bonds in that they denote partial ownership in an asset, whereas bonds are a debt obligation. Since sukuks share the risk of the backing asset, the holder is not guaranteed to receive back their initial investment.

R3 CEO David Rutter spoke about the partnership, saying that R3 believes Corda could modernize the economy in Saudia Arabia and the Middle East at large. Wethaq CEO Mohammed Alsehli also commented on the partnership, discussing the two firms’ overarching goals, saying:

“Our joint focus is on building world-class financial infrastructure in Saudi Arabia, in alignment with the Kingdom’s Vision 2030, and the UAE, pursuant to their ambitious fintech agenda, before we expand to the entire Middle East and Southeast Asia.”

Ripple-based platform Stellar said in July 2018 that it was the first distributed ledger protocol to obtain Sharia compliance certification, for the money transfer and asset tokenization field. Stellar was approved by the Shariyah Review Bureau — an international Sharia agency licensed by the Central Bank of Bahrain.

Cryptocurrency NOORCOIN was certified with a Sharia Certificate from the World Sharia Advisory Committee before Stellar back in March. At the time, NOORCOIN declared itself as “the first sharia-compliant utility token.”

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