Abu Dhabi Islamic Bank makes landmark transaction on blockchain
Abu Dhabi Islamic Bank (ADIB) revealed on Wednesday that it had completed a transaction on TradeAssets, a trade finance marketplace powered by distributed ledger technology. In doing so, the bank became the first Islamic bank to transact on DLT at a time when financial institutions in Islamic nations are steadily building on the technology.
ADIB sold part of its trade finance portfolio to partner banks through the TradeAssets platform in what is known as a trade finance distribution. This is when financial institutions, upon hitting the maximum figures they can take on their balance sheets, sell off part of the business at hand to other banks. The successful transaction is the product of a year’s worth of work between ADIB and TradeAssets, Bahraini business outlet Trade Arabia reports. The partnership is geared towards automating trade finance transactions through blockchain technology.
The bank, which has over $33 billion in assets under management, is committed to enhancing efficiency through the use of emerging technology such as blockchain, its head of transaction banking Haytham Elmaayergi stated. He added:
The completion of the first trade distribution transaction using Blockchain by an Islamic bank shows that ADIB is at the cutting-edge of global transaction banking. As the only Islamic bank providing end-to-end Sharia’a-compliant trade financing through digital channels, ADIB is committed to expanding its digital footprint in trade financing and distribution, enhancing the efficiency and productivity of businesses across the region and globally.
TradeAssets launched its blockchain-powered trade finance platform last year, initially targeting secondary market transactions. At launch, the platform enlisted 25 banks, with most of them in emerging markets such as Bangladesh. Its popularity has grown and now, it has over 150 members, with many of them being from the Middle East. They include UAE’s largest bank, the First Abu Dhabi Bank, Oman’s largest lender Bank Muscat and Japan’s third-largest bank, Sumitomo Mitsui Financial Group.
ADIB’s venture into blockchain comes at a time when the UAE has continued to embrace the technology, with the city of Abu Dhabi becoming the epicenter. Just over a month ago, the Abu Dhabi financial markets regulator updated its digital currency regulations to comply with FATF standards. The new rules require any ICO issuer to get the regulator’s nod before proceeding with its token sale.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.