The impact of the Blockchain technology on the global Sukuk industry: smart contracts and asset tokenisation
Andrea Delle Foglie, Ida Claudia Panetta, Elias Boukrami, Gianfranco A. Vento
Abstract
This paper aims to investigate the Sukuk industry and Distributed Ledger Technologies (DLTs) applications exploring their fundamentals and criticisms to shed light on potential opportunities both for Sukuk issuances and for the securitisation industry. DLTs are characterised by intense competition and potential future disruption in the banking and finance industry for both conventional and IF arena and Sukuk industry representing a leading sector. Using a case-study analysis on some pioneers’ Blockchain-based Smart Sukuk and tokenisation projects, we try to identify the potential streamlining of the inquiry and issuance process. This paper contributes to the literature on Sukuk and the use of DLTs matching the need demand and supply-side, highlighting new opportunities for the Islamic Finance (IF) standardisation, considering the different interpretation of Shariah between countries making up a barrier to its growth. Therefore, the ShariahTech industry's outgrowth might contribute to developing new instruments as ancillary or alternative to conventional bonds providing new policy implications for regulatory authorities and stimulating the global market competition.