Wethaq, a Dubai based-fintech startup firm, recently signed a strategic partnership with R3 (R3 LLC) blockchain technology company. The aim of the partnership included developing R3’s Corda offering based platform for trading and issuing Sukuk securities.
An Islamic securities platform
On Aug. 28, a certain press release revealed that Wethaq’s platform would be built on Corda — R3’s open-source enterprise blockchain platform. Builders of the platform aim to tap the Islamic Capital Markets through implementing measures that ensure that it becomes compliant with the relevant Sharia Law.
With Wethaq’s platform, market infrastructure for trading and issuance of various Sukuk securities is usually improved. Issuance of Sukuk requires a considerable amount of time due to the heavy regulations. This process, together with the entire Sukuk lifecycle, will become streamlined and automated via the platform.
In essence, Sukuk is a kind of Sharia-compliant financial certificate that resembles a bond. However, traditional bonds are a debt obligation, whereas Sukuks have partial asset ownership. A holder usually has no guarantee of receiving back an initial investment since sukuks partly back an asset.
The partnership, — according to David Rutter (CEO of R3) —would help modernize Saudia Arabia’s economy and to a large extent, the Middle East.
Another person that commented on the partnership was Mohammed Alsehli Wethaq CEO who discussed the overarching goals of the two firms, stating:
“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.”
Another Sharia-compliant platform
In July 2018, Stellar — a Ripple-based platform — stated that it would become the first distributed ledger protocol to get a Sharia compliance certification, enabling it to operate in the asset tokenization and money transfer field. Fortunately, Bahrain’s Central Bank licensed international Sharia agency Shariyah Review Bureau later approved Stellar.
However, Back in March, before Stellar got its certification, the World Sharia Advisory Committee gave a Sharia Certificate to NOORCOIN Cryptocurrency. The event made NOORCOIN declare itself as “the first sharia-compliant utility token.”