Page 73 - CMA Journal (Mar-Apr 2025)

Focus Section

Figure 4
efficiency and credibility, addressing
concerns about the lack of real-world
asset backing in conventional crypto
products and aligning more closely
with Islamic principles. For example,
a Muslim investor traditionally
limited to sukuk tied to real estate
can now, through DeFi sukuk, invest
in Shariah-compliant sectors such as
green energy or tech startups. A
tokenized sukuk funding a solar
energy project, for instance, can be
traded on decentralized exchanges,
offering improved liquidity and
Source: PrimeXBT
broader market access. This innovation not only
As shown in Figure 4, Paxos Gold (PAXG) and Tether enables greater portfolio diversification but also
Gold (XAUt) dominate the market, each with upholds Islamic finance values—supporting
capitalizations exceeding USD 500 million. Other projections that the global Islamic finance market
notable tokens include DigixGlobal (DGX) and Perth will grow to USD 6.67 trillion by 2027.

Mint Gold Token (PMGT), reflecting growing market Figure 5
maturity and a diverse range of offerings. This DeFi Sukuk Market Value from 2012 to 2027 (USD in Trillion)
expanding market capitalization highlights 8
increasing investor trust in gold-backed tokens as 7 6.67
reliable, Shariah-compliant stores of value within the 6
digital asset ecosystem. 5 3.87 4.07 4.5
4 3.03
(c) Tokenized Sukuk - Tokenized sukuk have the 3 1.78 2.06 1.97 2.17 2.41 2.56 2.67
potential to elevate Islamic finance by making 2
Shariah-compliant bond investments more
0
accessible to Muslims worldwide. Their integration 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2027
with decentralized finance (DeFi) enhances capital Source: HAQQ Insights

Case Studies

CASE STUDY 1 CASE STUDY 2
Malaysia – A Global Islamic United Kingdom – Islamic Finance in a
Finance Powerhouse Non-Muslim Market
Malaysia is a leader in global Islamic finance, accounting The UK stands as a prominent Islamic finance hub
for over 20% of global sukuk issuance in 2023. outside the Muslim world.
Key highlights: Key highlights:
• Strong regulatory support from Bank Negara • Home to five fully Shariah-compliant banks.
Malaysia (BNM). • First non-Muslim country to issue sovereign sukuk.
• Major players include Bank Islam and CIMB Islamic. • Strong institutional and academic backing for Islamic
• Pioneer in green sukuk and digital crowdfunding finance.
initiatives.
CASE STUDY 3 CASE STUDY 4
UAE – Blockchain and Islamic Digital Innovation Kuwait Finance House (KFH)
The UAE has pioneered the integration of blockchain KFH is a global leader in Islamic banking, known for its
technology with Shariah-compliant fintech solutions. innovation and financial strength.
Key highlights: Key highlights:
• Dubai Blockchain Strategy drives digital
transformation across sectors. • Acquired Ahli United Bank, raising assets to USD 124
• emCash: The world’s first state-issued blockchain billion.
currency. • Launched Tam, Kuwait’s first Shariah-compliant
• Adab Solutions' FICE: The only Shariah-compliant digital bank.
crypto exchange.
• Wethaq platform: Revolutionizes sukuk issuance • Features biometric login, instant card issuance, and a
with digital tools. comprehensive digital banking platform.
• Islamic finance market is projected to grow to USD
7.7 trillion by 2033

ICMA’s Chartered Management Accountant, Mar-Apr 2025 71