The blockchain enters Islamic finance
The blockchain enters Islamic finance

The blockchain enters Islamic finance

By Fabio Lugano - 11 Jul 2018

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Arabian Chain, a company specializing in blockchain development, and the innovative company Curiositas will offer a set of smart contracts linked to automatic legal systems to provide services to Islamic finance.

The platform in question will be called Wethaq and will target Islamic financial markets, acting as a supplier of services to financial institutions, investors and capital earners both at pre-sale, issue and management of products related to sukuks, or debt securities linked to Islamic finance.

Islamic finance has particular characteristics because Sharia considers usury all interest payments, as well as forbidding any financing of activities that are Haraam, that is, forbidden and sinful.

This means that the remuneration of investments must be made through a complex set of contracts that allow a form of profit sharing or payment of services.

The Wethaq platform will offer automated services in relation to sukuks.

In addition, it will include a range of ancillary services such as investment banks, lawyers, consultants, rating agencies and ensure the presence of qualified investors.

The platform should become operational in the first half of 2019. The director of Curiositas, Dimitrios Vourakis, commented on the launch of the new platform:

“Our platform is relevant because there is an urgent need for automation and standardization in the Islamic capital market. Financial institutions, investors, earners, all currently bear substantial operational costs charged by brokers and intermediaries with a complexity greater than that of traditional markets. Wethaq separates the essential elements from the additional ones, such as payment and custody services, and offers the latter through an automated platform “.

In 2014, Islamic finance weighed in excess of 2000 billion dollars, equal to one per cent of the value of world finance, mainly concentrated in the countries of the Persian Gulf.

Fabio Lugano

Graduated with honors from Bocconi University, Fabio is a consultant for companies and wounded shareholders of the Banche Venete. He is also the author of "Scenari Economici", and lecturer and analyst of cryptocurrencies since 2016.

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