Global Islamic Economics

An ecosystem inspired to reshape the Global Islamic Economy and beyond.

Smart Islamic Banking

Blockchain is a technological evolution that can support and enhance the transparency feature, which is the core underlying principle of all transactions, products in the Islamic Economy and finance industry.

It is a distributed ledger that records that a transaction has happened, when it happened and that it has happened correctly without revealing any confidential details about the subject or the involved parties. Using Blockchain in Islamic banking will solve the challenge of Shariah compliance of Islamic banking products and services.

Most of Islamic banks can do their operation base on blockchain technology such as and provide e-banking and online banking solutions. This secure online banking web service is particularly designed for the banking needs of corporate clients by enabling them to manage their payments and reporting needs.

Online Banking offers you a quick and convenient way to manage your finances, pay bills and keep up to date with your account. Our free, 24/7 online banking system, is a highly secure and reliable banking platform through which you can access wide range of banking services anywhere, anytime

It allows clients to conduct transactions like local and international transfers and payments with the following services and operations:

  • International and local Telegraphic Transfers
  • Payments to vendors, salary payments and payroll solutions
  • Download swift copies of online outward payments
  • Request for Cheque Books, Demand Draft or Managers Cheque
  • View Account Statements and Comprehensive Account Summary
  • View and Download Account information in real time
  • Utility Bill payments
  • Pension payments.
  • Intuitive user interface

High Reliability

multi-peers network ensure robust of system

High Confidentiality

Data on a need-to-know basis

High Scalability

Support more partners

Rich Queries

Over an immutable distributed ledger

Smart Sukuk

Sukuk – has thus far been limited to governments and large institutions due to the high issu-ing costs and complexity. But there is new approach and innovation in Islamic Economy from HLC perspective aims to using the blockchain. Using blockchain technology can solve most of the issues in the Sukuk issuance. Islamic Securities can be executed according to predefined rules can be coded as a smart contract in capital markets.

Experiments are ongoing on the issuance of smart bonds. Sukuk issuance follows strictly Shariah law and principles of permissible variance, cleansing, the balancesheet ratios to be satisfied, the ‘conglomerate’ issue and the ‘core’ activities.
These Smart Sukuk can also be coded as if-then statements to ensure both compliance to the Shariah and transparency for all involved. This would increase the investors satisfictions on the Shariah compliance of Sukuk product.

Smart Sukuk standardizes and automates much of the legal, accounting, and payment overhead of conventional sukuk offerings – all backed by fully licensed legal entities in the issuing jurisdiction.

Blockchain Makes Sukuk Smarter

The Investors in a sukuk are issued a share of ownership, which represents their fractional ownership in the underlying asset or structure with the terms of the sukuk ownership. Holders of sukuk receive periodic payments from the fundraising institution. Investors can hold a sukuk until maturity, or they can sell their ownership in the sukuk to a third party. This subsequent sale to a third party is known as “secondary trading” and is what distinguishes a sukuk as a “securitized” asset.

Smart Sukuk runs on the Ethereum blockchain, which supports “smart contracts”. A smart contract encodes business rules directly into the underlying payment currency itself – the blockchain itself enforces the contract rules regarding payments and transfer of ownership.

Smart Sukuk Definition

Smart Sukuk, can be defined as tokenization by collecting funds from investors in exchange for Sukuk Tokens representing an ownership portion of the Sukuk investment. When the institution makes payments, the funds are automatically distributed back to the Sukuk Token holders via the blockchain according to the rules of the smart contract in Islamic Economics without the need of conventional banks or intermediaries.

Smart Sukuk is where the investors transferred Ether from their existing blockchain wallets, such as a Coinbase account, to their Nivaura cryptocurrency wallets. On settlement, ether passed from investors’ cryptocurrency wallet addresses to LuxDeco’s address, and the bonds passed from LuxDeco’s securities wallet address to the investors’ addresses. All of this is recorded on the ethereum blockchain technology and represented through the Nivaura blockchain interface on the Nivaura platform. From a securities perspective, the blockchain served as the register and denoted legal and beneficial ownership. Because the Financial Authority recognised the blockchain as an independent third party, there was no need for a registrar to keep a register of holders: the register is the blockchain. Smart contract code was put in place behind the regular legal contracts to automate delivery of the bonds and payment flows, so LuxDeco issued the bonds and paid investors’ interest and principal au-tomatically, without further action.

Smart Sukuk Tokens support an industry standard protocol, called ERC20. The standard allows tokens to be traded globally on a variety of public cryptocurrency exchanges.

Shariah law is a Must for Smart Sukuk

Islamic Economics and finance is bound by Shariah rules and regulations from the regulatory authorities. A recent working paper written by Prof. Abdussalam and published by University Utara Malaysia notes that cryptocurrency like HLC token and Ethereum in Islamic Economy is permissible based on its attributes and underlying asset which is HLC commodity.

The Halalchain will offer the Smart Sukuk in jurisdictions with clear and viable legal and regulatory frameworks to support the issuance of Smart Sukuk. “Take sukuk alijarah (lease based) as an example – an Sukuk ijarah is permissible and Shariah compliance if the true ownership of the underlying asset is legally transferred to the Sukuk holders. And for a Smart Sukuk, it’s only acceptable because of its regulation on trading and exchange in the Cryptocurrency Assets.”

Smart Sukuk supports issuance of the sukuk in global/local currencies and eliminates the need for institutions to add cryptocurrency to their balance sheet. The use of blockchain allows for legal and beneficial title to be united. This meant that the global/definitive note structure that underpins most Islamic securities issuance was dispensed with, removing a lot of the detailed language that first-time issuers often struggle with.

High Reliability

multi-peers network ensure robust of system

High Confidentiality

Data on a need-to-know basis

High Scalability

Support more partners

Rich Queries

Over an immutable distributed ledger

Smart Takaful

Takaful operator can record transactions on a blockchain technology at each point in the transactional lifecycle, from seeking a quotation to binding contract, the immutable life record of that contribution or the participant can be traced.

Takaful undertakigs is a system of Islamic insurance based on the principle of mutual cooperation and donation (Tabarru commitment), where the risk is shared collectively and voluntarily among the participants. Smart Takaful claims, is a distributed process that involves many parties, participant, Takaful Operator and beneficiary, often with insufficient transparency to the participants. Takaful claims processing and settlement, are areas where participants make a contribution and the Takaful operator sets out rules under which, the participant gets a coverage. The level of expertise required for claim adjusters or the investigators, who investigate, negotiate and settle claims, varies directly with the nature of loss, under the jurisdiction whose law applies to the contract creation, interpretation and enforcement, one of principal consumer protection issues within the Takaful pricing, underwriting, and claim settlement process, the rules based claims processing or otherwise a voting based claims processing, mostly followed by mutual agreement.

The settlements are also subject to interpretation of the rules that apply to the product and participant situation. This leads the claim processor to apply rules and make decisions before paying out the claim. This goes into building incentive models to enable groups to decide which claims should be paid out and which claims should not be paid out. Further, in lines of Takaful where losses require onsite examination, claims adjusters may be sent to conduct an investigation. Takaful smart claim (TSC), through the blockchain-based systems could help radically improve the Takaful company operations in term of efficient claim processing and settlements, claims adjusters’ investigation and decisions on which claim should be paid, with the means to manage claims in a transparent, responsive and irrefutable manner. These features or innovation could be built into the Takaful existing market infrastructure in making the claim, it would allow for the auto execution of coded logic embedded into smart claims.

The blockchain technology encourages the Takaful operator and their network to collaborate within the ecosystem in a transparent way of Takaful claim processing and settlement. Blockchain may be able to prevent fraud because the transactions are transparent and there can be fewer forgeries or manipulation of the information acquired by the adjusters during the investigations. All transactions written or recorded in a blockchain system are visible to Takaful operator, brokers, third-party administrators, service providers shared cross multiple locations and impossible to alter or delete. As the basis for establishing consensus and enabling a contract between multiple Takaful operator with an intermediary will be very useful as it creates a permanent audit trail. Mutual consensus verification protocols allow a network to agree on updates to the database collectively, with a certainty that the overall data set or information for the claims remains correct at all times without the need for a central governing authority.

Blockchain transactions can already be reverse engineered to allow a pretty good guess at the transactor. Another blockchain virtue is the decentralization of customer databases and a federated identity infrastructure that allows an individual to identify information online without having to supply personal information (for example, a driver’s license number to multiple Takaful operator). Rather than being held in any number of central databases, sensitive data is encrypted and distributed and a blockchain is used as an audit ledger to re-authenticate the user.

Storing and reconciling data sets of financial obligations and ownership forms are the core of Takaful claims operations. The current methods are highly complex, use fragmented IT and data architectures and suffer from a lack of common standards. This creates a continual need to reconcile data with massive systems and process duplication, leading to high costs and protracted time to execute tasks. Blockchain can be used to manage shared intelligence and could be used to drive efficiency in Takaful claims processing independent of fraud, thus bringing a structural change to the industry.

High Reliability

multi-peers network ensure robust of system

High Confidentiality

Data on a need-to-know basis

High Scalability

Support more partners

Rich Queries

Over an immutable distributed ledger

Stable Currencies

A “stable coin” is a cryptocurrency that is pegged to another stable asset, like gold or the U.S. dollar. It’s a currency that is global, but is not tied to a central bank and has low volatility. On any given day, it is common to see an increase to 10-20% or even a decrease. That makes using most cryptocurrencies for daily transactions inconvenient. The adoption of stable coins will be be a catalyst to the new decentralized internet becoming mainstream.

Stable currencies are particularly relevant when it comes to Islamic finance, it allows each unit of value to be backed by a physical assets such as gold. This helps to limit volatility and speculation and has been deemed acceptable under the Shariah rules and principles.

High Reliability

multi-peers network ensure robust of system

High Confidentiality

Data on a need-to-know basis

High Scalability

Support more partners

Rich Queries

Over an immutable distributed ledger