Friday, February 26, 2021
Editor's Pick Iran Fara Bourse eyes blockchain Sukuk following launch of capital market initiatives

Iran Fara Bourse eyes blockchain Sukuk following launch of capital market initiatives

Iran Fara Bourse (IFB), which operates under the supervision of the Securities and Exchange Organization and is one of the four exchanges in Iran, is ready to kick off Sukuk issuances using blockchain technology.

The exchange is waiting for the Central Bank of Iran to launch the crypto rial, Iran’s central bank digital currency (CBDC), to jump-start its foray into blockchain technology for the capital market. “This is very good news for crypto start-ups in Iran, and also for us, as we can start initiatives like blockchain Sukuk,” Mahsa Tavakoli, the strategy director at IFB, told IFN, the sister publication of IFN Fintech.

The CBDC, which has been in the works for the past year, will be used in smaller interbanking transactions once launched. Its issuance and the subsequent launch of blockchain Sukuk will complement the newly launched Crowdfunding Market, for which IFB is the appointed regulator, and which has already received over 72 applications from start-ups, seven of which have a focus on blockchain technology.

There are some 41 start-ups listed on the market, including KarenCrowd, Dongi, HamAfarin and ParsFunding, the first licensed crowdfunding platforms in the country. Dongi raises funds for SMEs within a span of up to three months, and KarenCrowd connects active start-ups and entrepreneurs to its 1,200 member investors, having raised over IRR800 billion (US$18.96 million) since it started.

IFB had also launched its Sukuk Index, or Sindex, along with the Crowdfunding Market, which tracks government Sukuk and securities, Islamic treasury bills, long- and short-term securities and composites.

“Sindex can be the measure for fixed-income portfolio managers’ performance; portfolio managers are now capable of appraising their performance, track Sindex or even tilt it,” Amir Hamooni, the managing director of IFB, said. “Our capital market previously suffered from the lack of a benchmark in this area. Investors can now have a transparent look at risk-free return investments. Utilizing a single best-verified index in the debt market not only facilitates retail investors’ analyses, it also assists academic and practical research. It definitely leads to more precise decisions in investing and even valuations.”

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