The Islamic Development Bank (IsDB), based in Saudi Arabia has collaborated with a Tunisian Start-up to develop an interbank blockchain tool, stated a press release on November 29th. IsDB is looking out for ways to improve the Islamic financial institutions, better management of liquidity and overall improvement of the sector.
IsDB will conduct the project through its subsidiary, The Islamic Corporation for the Development of Private Sector (ICD).
There was an agreement signing between the two corporations, IsDB and the Tunis-based start-up. The Tunisian Startup describes itself as an investment advisory firm focussed on alternative financial solutions keeping in mind the Islamic principles. The whole and sole motivation behind the use of blockchains for the drive lies in the relative prejudice of the Islamic banks on a worldwide scale.
In the press Release, Ayman Sejiny, The CEO of the ICD stated that ‘“IT will always play an important role in the financial system. We will consistently pursue our strategy of service orientation and help our partners with innovative Sharia-compliant FinTech solutions.” Just like many other administrations, Saudi Arabia has also gone ahead in maintaining a risk-averse position on cryptocurrencies but seconding the idea of blockchains.
There are still debates which question the compatibility of the industry with Islam. According to coin telegraph, Turkey has embraced a conservative stance which later proved to be disfavoured by the UK mosque. One of the Abu-Dhabi based banks also disclosed that it had completed the suduk (Sharia-compliant bonds) transactions with blockchain.