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Fintech and Islamic finance: Blockchain’s Proof of Work vs Proof of Stake

Finally, the long-awaited book on Fintech in Islamic Finance, which I am honored to have contributed is ready for delivery:

https://www.taylorfrancis.com/books/e/9781351025584

In my contribution I looked at how the underlying economics of increasing returns and zero marginal costs impact business models, with then causing challenges on the legal and Islamic legal side for instance regarding smart contracts and artificial intelligence. Fintech opens to contribute to Islamic finance, as it allows to disrupt debt driven financing towards equity, if guided in the right direction. Jonathan Lawrence of KL Gates in charge for Fintech and Islamic finance at his law firm was my co-author.

BTW: If any reader knows about blockchain solutions for financial inclusion, especially for the Muslim world, please point me in the right direction. I would love to see this discussed on the next Global Donors Forum 2020 in Geneva, which is the biannual convention of Muslim Philanthropists.

Gassner's picture

Call for Innovation via Transform Fund 2019

The Islamic Development Bank (IsDB) has established a special Fund, known as Science, Technology and Innovation Transform Fund (IsDB-STIF) to support its Member Countries in finding practical solutions to key development challenges related to 6 focused Sustainable Development Goals through the power of innovation. Transform is a multi-million-dollar fund that provides seed money for innovators, startups, SMEs and institutions that need initial funding and growth capital to develop their ideas and compose a strong business proposal. The second round for the Call for Innovation under Transform Fund is now open. Deadline for submission is 1st June 2019.

https://www.isdb-engage.org/en/challenge/call-for-innovation-via-transfo...

Al Ghurair Foundation announce grantees of £5.5 million Refugee Education Fund

The Abdul Aziz Al Ghurair Refugee Education Fund announced its grantees for their second round of funding, following the end of the inaugural round in 2018. The fund aims to support 10,000 students through secondary level and vocational education. First two of funding dispersed AED74 million (approximately £16 million) supporting the education of over 17,000 youth in Jordan, Lebanon, and UAE.

Islamic finance in Africa to grow as #sukuk issuance strengthens- Moody’s

According to Moody’s Investors Service, Africa’s Islamic banks will continue to perform well and African sukuk issuance will keep expanding steadily. In October and December last year, the governments of Morocco and Nigeria issued $105 million and $327 million of sukuk. In Morocco it was an inaugural issuance and the transaction was 3.6 times oversubscribed. According to the rating agency, structural constraints that have prevented sukuk markets from developing still remain. These constraints include the legislative complexity and time associated with sukuk issuance, especially for new issuers, and the need to identify physical collateral to support the sukuk structure. Moody’s expects robust issuance in African sukuks over the next 18 months. Egypt, Algeria and Sudan have recently expressed interest in issuing sukuk.

Gulf Bonds Go From Haven to Hazard as Saudi Strikes Stun Market

Money managers poured into the Gulf region till Saturday’s unprecedented attack on Saudi Arabia’s key oil facilities. That drove record gains for bonds in August as they sought refuge in securities boasting an average credit score of A+ amid global trade tensions. According to a Bloomberg Barclays index, Saudi Arabian bonds handed investors the biggest loss, about triple that of Qatari securities. The strikes in Saudi Arabia could escalate into a showdown, with the kingdom and U.S. on one side, and Iran and proxy groups from Yemen to Lebanon, on the other. Iranian-backed Houthi rebels in Yemen claimed responsibility for the assault and warned that oil installations in the Arab nation remain a target.

Assets under management in GCC to grow steadily from $260bn in 2018, Moody's says

The asset management industry in the Arabian Gulf is set to grow, as regional governments overhaul their hydrocarbon-dependent economies and ease regulations. According to Moody’s Investors Service, investment managers in the six-member economic bloc of the GCC had $260 billion (Dh954bn) of assets under management at the end of last year. The Gulf states are trying to overhaul their economies and cut their dependence on oil. Saudi Arabia and the UAE are pursuing their own economic reforms to develop alternative lines of revenue. Both countries have introduced laws to broaden their appeal to foreign investors. Moody’s expects global market leaders to expand their presence in the Saudi Arabia due to a relaxation of foreign ownership limits coupled with more transparent regulations.

Boards of Kuwait Finance House and Ahli United Bank agree terms of possible #merger

The boards of Kuwait Finance House and Ahli United Bank agreed on a share swap ratio. AUB said its board approved a final exchange ratio between the two lenders of one KFH share for every 2.325581 AUB shares. A final decision on the deal is subject to approval from shareholders of both banks, central banks and other authorities in Kuwait and Bahrain. The approved ratio is the same as the one announced in January, when the lenders hired HSBC and Credit Suisse as advisers to carry out financial and legal due diligence of each other’s accounts. According to equity analysts Mohamad Al Hajj and Elena Sanchez-Cabezudo, this merger would increase KFH’s expected weight within MSCI Emerging Market Index by 8 basis points and increase expected flows in May 2020 by $370 million. KFH has tried to acquire AUB in the past, but talks stalled over a difference in valuation.

CBK amends guidelines of corporate governance in Kuwaiti banks

The Central Bank of Kuwait (CBK) has amended governance regulations for Kuwaiti banks, allowing them to add independent members to their boards of directors and subcommittees. The new regulations define independent board members and the conditions of such independence. Dr Mohammed Yousef Al-Hashel, the Governor of CBK, said that independent members to banks’ board of directors will enhance board members’ independence as a basic principle of sound governance practises. The amendments also allow a minimum of two independent members from 30 June 2020, then four from 30 June 2022 to avoid unexpected demand for independent members and allow gradual implementation of the decision.

Islamic groups ‘call upon all Muslims’ to divest from oil and gas

The Islamic Foundation for Environmental and Ecological Sciences, the Mosques and Imams National Advisory Board and the Bahu Trust released a statement calling on Muslims to pull investment from the oil and gas sector. The three organisations said it was time the Muslim community stood firmly with those committed to action on climate change. They suggested that investment funds be shifted to renewable energy solutions, low-carbon transport and sustainable food sources. The leaders of the three Islamic groups added that the investment in cleaner energy was vital for a sustainable future. They also added that the need to realign oil and gas finances was in keeping with Islam’s ethical values.

Istanbul to host refugee economic inclusion conference

Istanbul is hosting a two-day conference to discuss the economic inclusion of young refugees in their host communities. The conference is set to bring together more than 150 stakeholders from the MENA region, policymakers, international and national NGOs, private sector, academia, and entrepreneurs. Participants will discuss various methods for enhancing economic inclusion of refugees and host communities in the Middle East and North Africa (MENA) region. The two-day program will be held in partnership between the Dutch International NGO Spark and Islamic Development Bank (IsDB), with the Islamic Solidarity Fund for Development (ISFD) and the Dutch Ministry of Foreign Affairs as sponsors.

The Musée du Louvre, Paris, opens new and expanded spaces for exploring Islamic Arts supported by Alwaleed Philanthropies

The Musée du Louvre officially opened new and expanded spaces to explore Islamic art with the support of Alwaleed Philanthropies. The new exhibition space offers visitors an immersive introduction to Islamic art. The center showcases a diverse range of art and artifacts stretching from Spain to India and explains the evolution of Islamic art in style, form and medium. Louvre President Jean Luc-Martinez hopes to reach even more visitors, and provide them the keys to understanding the wonderful artistic heritage. The new and expanded spaces for exploring Islamic art has been designed to offer full disability access and includes a series of interactive displays.

Dubai's Emaar Properties sells $500 million 10-year #sukuk

Dubai's Emaar Properties is set to raise $500 million from the sale of sukuk. The transaction has received orders of nearly $2.5 billion, including $300 million of interest from the banks arranging the deal. The deal is part of a $2 billion debt programme and is offering investors a profit rate equivalent to 235 basis points over mid-swaps.
Standard Chartered acts as coordinator. Other banks leading the transaction are Dubai Islamic Bank, Deutsche Bank, Emirates NBD Capital, First Abu Dhabi Bank, Mashreqbank and Sharjah Islamic Bank.

#Egypt mulls around $7 billion international bond issuance

Egypt will approach investment banks soon to advise on a planned international bond issuance to raise between $3 billion and $7 billion by June 2020. The new offering could include Egypt’s first Panda, Samurai, Sukuk and green bonds as well as euro- and dollar-denominated bonds. Khaled Abd Elrahman, the Egyptian Deputy Minister of Finance, said that the so-called request for proposal is being prepared and will be sent to banks imminently. Egypt was able to return to global bond markets in 2017, lowering its borrowing costs overseas as domestic rates soared amid a far-reaching economic reform programme. The government is now seeking to vary its instruments and gradually move toward longer-term credit to reduce the burden of debt. Finance Minister Mohamed Maait said that foreign holdings in Egypt’s Treasury bills and bonds currently stand at about $20 billion.

DIFC FinTech Hive receives huge response from global participants

Dubai International Financial Centre’s FinTech Hive has announced the commencement of the 2019 edition of its accelerator programme. The third edition of the programme received an overwhelming response of over 425 applications from across the world. Finalists include 15 start-ups specialising in the FinTech sector, four specialising in the Islamic FinTech sector, ten in the InsurTech sector, and two in the RegTech sector. The accelerator programme consists of a three-month curriculum in which a group of selected finalists work closely with stakeholders to address the needs of the region. The programme will culminate in an 'Investor Day', offering the participating start-ups an opportunity to showcase their achievements to prospective investors.

BML opens new Islamic Banking headquarters

Bank of Maldives (BML) inaugurated the new headquarters of its Islamic Banking arm in the capital city of Male. The facility will provide counter services for transactions, with a range of financial services available for both individuals and businesses. BML Islamic offers a comprehensive range of completely Shari’ah compliant alternatives to the bank's conventional products. The bank assured that its services were developed in accordance with international standards and best practices for Islamic Banking. Customer deposits are maintained in a separate fund utilized exclusively for Shariah-compliant purposes. The process is overseen by the bank’s Shariah Advisory Committee, which includes internationally recognised experts.

#Turkey's Takasbank reveals blockchain platform to transfer gold

Turkey’s Takasbank launched its blockchain-based electronic platform for trading gold called BiGA. The project aims to enable people to transfer physical gold stored at the Borsa Istanbul Stock Exchange via digitized gold units on a blockchain. Although the units will have the same form and function as physically backed stablecoins, their value will be tied to the traded goal. The bank will provide users with a wallet to store the tokens, and BiGA can eventually be used as an e-commerce payment option. Notably, the word “BiGA” is the Turkish abbreviation for one gram of gold. Earlier this week, New York-based Paxos Trust Company has launched PAX Gold, a gold-backed Ethereum token, with approval from the New York State Department of Finance Services. One PAXG token will be supported by one fine troy ounce of London Good Delivery gold stored in professional vault facilities in London.

Islamic finance contracts estimated to reach $2.5trn

The Qatar International Center for Conciliation and Arbitration (QICCA) has participated in the 7th East Africa International Arbitration Conference (EAIAC) held on 29 - 30 August 2019 in Nairobi. As QICCA’s Board Member, Sheikh Thani bin Ali bin Saud Al Thani attended the event and delivered a research paper on Islamic finance. During the sessions of the conference, Sheikh Thani informed attendees on the expertise of Qatar in Islamic finance as well as Malaysia’s experiment, in addition to experiments of non-Islamic countries such as Singapore. The conference which was held under the theme "Government Contracting and Investment Disputes: Lessons for States and Investors" saw a participation of more than 250 attendees from Kenya, Uganda, Tanzania, Burundi, Rwanda and Ghana. QICCA General Counsel Minas Khatchadourian said that the world’s Sovereign Wealth Investments will reach $15trillion by 2020, which represents 25% of the total value of assets that are managed over the world.

Source: 

https://www.thepeninsulaqatar.com/article/08/09/2019/Islamic-finance-contracts-estimated-to-reach-$2.5trn

QFC joins Islamic Financial Services Board

The Qatar Financial Centre (QFC) has been admitted to the international standard-setting organisation, Islamic Financial Services Board (IFSB), as an Associate Member. As an Associate Member, the QFC can participate in the IFSB General Assembly, receive technical assistance from the IFSB and participate in Working Groups, Task Force and closed-door discussions. The Secretary-General of the IFSB, Dr. Bello Lawal Danbatta welcomed QFC and reaffirmed the board's committment to promoting resilience and the stability of Islamic financial services.

Accion Venture Lab launches $23M inclusive fintech startup #fund

Accion, a non profit that supports microfinance institutions globally, has announced that its Accion Venture Lab is adding $33 million to its initial capital pool. Accion starts with the launch of a new $23 million fund, and an additional, separate $10 million investment will follow. The new fund comes from a group of third-party impact and commercial investors, bringing Venture Lab's total capital under management to $43 million. Launched in 2012 with $10 million in capital, Accion Venture Lab invests in fintech startups at the seed stage. The Venture Lab portfolio focuses on the fintech space that offers the potential to reach underserved communities. Today, those include insurtech, agricultural finance, digital lending, holistic MSME finance solutions, and personal financial management.

Jibrel to launch first globally regulated blockchain-powered private financing platform

Switzerland-based fintech company Jibrel Network announced the launch of Jibrel.com after its recent acceptance into the new ADGM (Abu Dhabi Global Market) RegLab cohort in the UAE. Jibrel.com claims to be the first fully regulated blockchain-powered private financing platform. Jibrel’s purpose is to foster open financial systems and digitization powered by emerging technologies. Its mission is to tokenize an array of assets in a manner that is borderless, asset class agnostic and customizable for different use cases. The new platform will enable investors of all genres to connect with startups and SMEs, creating new capital formations. Talal Tabbaa, co-founder and COO of Jibrel believes this platform will transform the MENA startup ecosystem by providing access to a broader investment base, so that startups will raise more liquidity, and spur the growth of the sector further in the region.

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