Page 71 - CMA Journal (Mar-Apr 2025)

Focus Section

Comparative Adoption: Islamic vs. Non-Islamic Countries

Category Islamic Countries Non-Islamic Countries
Top Adopters Saudi Arabia, Iran, Malaysia, UAE, Kuwait, Qatar, UK, Luxembourg, South Africa, Nigeria, Hong Kong
Turkiye, Bahrain, Indonesia, Pakistan
Regulatory Central banks have dedicated Islamic finance Islamic finance units operate under mainstream
Frameworks divisions and Shariah boards regulatory bodies with advisory input

Sukuk Issuance High frequency of sovereign and corporate sukuk UK was the first non-Muslim country to issue
issuance; Saudi Arabia led MENA with $33.6 billion sovereign sukuk (2014), other countries like
in issuances in H12024 Luxembourg and Hong Kong have followed suit
Islamic Banking assets; Malaysia’s Islamic banking typically accounts for less than 5% of
Assets total banking assets in non-Islamic countries, but its
finance ecosystem presence is gradually expanding—such as in the UK,
which now hosts five Islamic banks.
market
Support like Saudi Arabia’s Vision 2030 and the UAE’s strategies; growing interest in ESG-compliant
sustainability agendas support Islamic finance financial products
growth
Religious, ethical, and inclusive financial access;
alignment with Shari’ah principles alignment with ESG trends; appeal to ethical
investors
Growth Trends in Islamic Finance challenges for Islamic scholars, regulators, and fintech
innovators. Below is a closer look at three key
The Islamic finance sector comprises several key components shaping this development:
components:
1) Islamic Cryptocurrencies
• Islamic Banking: Global Islamic banking experienced
steady growth between 2018 and 2023, with assets Islamic cryptocurrencies are digital currencies designed
increasing at a compound annual growth rate (CAGR) to comply with Shariah principles, particularly the
of 10.72% and a year-on-year (YoY) growth of 7.21% in prohibitions on riba (interest), gharar (excessive
2023. This growth was primarily driven by rising levels uncertainty), and involvement in haram (forbidden)
of financing and customer deposits. activities. These cryptocurrencies aim to align with
Islamic values by promoting ethical investment and
• Sukuk (Islamic Bonds): The total outstanding value minimizing speculation.
of sukuk reached USD 850 billion in 2023, reflecting a
YoY growth rate of 2.45%, down from 7% in 2022. (a) OneGram (OGC) - Launched in Dubai, OneGram is a
gold-backed cryptocurrency created to conform
• Takaful (Islamic Insurance): The global takaful with Islamic finance principles by anchoring its value
market was valued at USD 0.04 billion in 2024 and is to a tangible asset, thereby reducing speculative risk.
projected to grow to USD 0.05 billion in 2025, According to projections in Table 2, OneGram
eventually reaching USD 0.12 billion by 2033, driven demonstrates strong growth potential from 2025 to
by a strong CAGR of 14.3%.
2034, with predicted price increases ranging from
• Islamic Funds and Asset Management: 91.64% to 267.19%. Notable highlights include a
Shari’ah-compliant assets under management (AuM) projected 129.55% increase in 2025 and 267.19%
saw a moderate decline in 2023, falling to USD in 2032, reflecting consistent performance and
182.24 billion, down from USD 207.96 billion in 2022. growing appeal as a long-term, Shariah-compliant
investment.
Islamic Finance and the Rise of
Table 2:
Digital Assets Year Min. Price Max. Price Price Change (%) Remarks
2025 300.99 690.92 129.55 Health growth-
As the global financial ecosystem 2026 101.82 334.27 228.30
undergoes rapid digital transformation, 2027 125.24 266.05 112.43 Moderate growth
Islamic finance is progressively exploring 2028 206.04 671.06 225.69 Strong price movement
the integration of blockchain technology, 2029 526.45 1,402.00 166.31 Consistently strong price growth
2030 206.61 646.46 212.89 Very strong-
cryptocurrencies, and digital assets
2031 281.71 539.86 91.64 Lower than previous years
within the boundaries of Shariah 2032 487.36 1,789.53 267.19 High growth
compliance. This shift presents both 2033 1,068.27 2,844.90 166.31 Consistent strong performance
promising opportunities and notable 2034 419.25 1,288.52 207.34 Strong closing decade
Source: CoinData Flow - Link:
ICMA’s Chartered Management Accountant, Mar-Apr 2025 69