An open-source public blockchain has secured a Fatwa affirming the Shariah integrity of its mechanisms, paving the way for blockchain-based Islamic financial transactions and instruments.
Engaging Bahrain’s Shariyah Review Bureau as its Shariah advisor, Tezos Gulf has gained approval that its blockchain’s governance mechanism, proof-of-stake consensus mechanism and formal verification techniques are in compliance with Islamic principles.
This step by Tezos Gulf, the Middle Eastern arm of Swiss-regulated Tezos Foundation, is to facilitate the platform’s ambition to tap the growing Islamic finance market. Tezos’s blockchain has mostly been used by conventional issuers of digital securities.
“The engagement marks Tezos first step in promoting our open-source protocol to Islamic financial institutions in the GCC and South Asia pacific region,” shared Waleed Rassuli, the head of Tezos Gulf. “We see potential for Islamic financial institutions seeking to explore blockchain-based options for digital securities issuers and who also wish to issue securities on a platform that is compatible with the Shariah compliance ecosystem. We hope our blockchain will foster a vibrant version of the digital asset class which will move the Islamic industry forward.” Tezos Gulf’s strategic move is in line with a wider industry trend where Islamic financial institutions have been turning to distributed ledger technology to conduct financial transactions, including tokenization. Several institutions in the GCC have piloted blockchain Sukuk including Wethaq and Al Hilal Bank.