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Blockchain software firm R3 has entered into a partnership with Dubai-based fintech startup, Wethaq, to develop next-generation financial architecture for Islamic capital markets.
Wethaq, which is a “platform-as-a-service” firm, will build on R3’s Corda blockchain to oversee the pre-sale issuance, management, and financialization of Sukuk securities, which are Islamic financial certificates that are similar to bonds.
“Blockchain is driving an unprecedented period of innovation across capital markets, with more assets moving towards complete digitization,” David Rutter, R3 CEO, said. “Saudi Arabia and the wider Middle East region are areas where we see huge potential for Corda to modernize the economy and our partnership with Wethaq is a step towards achieving that.”
Sukuk securities are not only heavily regulated but also demand a considerable amount of time for issuance, as the process involves input from several banks, clearinghouses, and trustee entities. As such, Wethaq will use the blockchain platform to digitize Sukuk, decreasing the cost and time of issuance. Corda will streamline this lifecycle, as per a press release.
“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,” Wethaq CEO Mohammed Alsehli said.
A joint report by the two firms also revealed that Wethaq sought regulatory approval from jurisdictional and Shariah bodies. “The employability of ‘smart clauses’ gives Shariah boards the opportunity to ensure Shariah compliance by building and mapping real world Shariah requirements within the structure itself,” the companies said.
Meanwhile, Kerala Blockchain Academy (KBA), an initiative of the government of the Indian state of Kerala under the Indian Institute of Information and Technology and Management-Kerala (IIITM-K), has also joined R3 as a general partner.
KBA has already designed a developer certification program using the Corda blockchain. The program, which will be launched in September, features training on Corda App development intended for banking and technology professionals.
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