Islamic Financial Institution to Launch Interbank Blockchain Tools

The partnership will develop a suite of fintech products. The first is a trading platform for the physical commodities market. It addresses a central problem in Islamic banking: managing transactions between conventional financial institutions and Islamic banks while maintaining Shariah-compliance. Blockchain technology embedded in the platform can reduce settlement times and lower transaction costs while preserving religious requirements.

The platform addresses a geographic gap. Developed Islamic banking centers in Indonesia and Malaysia have access to sophisticated liquidity management tools. Banks in many Muslim-majority countries lack equivalent options. This partnership aims to deliver these solutions across markets.

Ayman Sejiny, who heads ICD, said in a statement: "IT will always play an important role in the financial system. We will consistently pursue our strategy of service orientation and help our partners with innovative Sharia-compliant FinTech solutions."

Islamic banks in Arab states have remained cautious about cryptocurrency. But regional institutions have embraced blockchain applications for business use. Last month, the Saudi British Bank joined the R3 blockchain consortium, betting that blockchain technology could speed up transfers and strengthen security.