Fusang Exchange achieves tokenisation of digital sukuk
30 October 2023 Malaysia
Image: patiwat/stock.adobe.com
Fusang Exchange, a global digital stock exchange built to enhance traditional finance, has tokenised and listed a digital sukuk.
It aims to revolutionise the Islamic investment landscape by providing investors with access to shariah-compliant high-quality liquid assets (HQLA).
According to the exchange, the tokenisation exercise is the 鈥榳orld鈥檚 first鈥� digitalisation of an institutionally-issued sukuk.
In addition, the digital sukuk represents the corresponding underlying sukuk issued by the International Islamic Liquidity Management Corporation (IILM).
Fusang led the tokenisation and listing exercise by using its proprietary Fusang Depository Receipt (FDR) structure to 鈥榳rap鈥� the underlying sukuk into digital form.
FDRs represent a 鈥榖eneficial interest鈥� in an underlying security, which can then be listed, traded and settled on the Fusang Exchange, the firm explains.
Commenting on the announcement, Fusang Exchange CEO Henry Chong says: 鈥淔usang鈥檚 next-generation tokenisation technology and standardised legal framework has created the world鈥檚 first truly global digital stock exchange.
鈥淥ur institutional-only digital infrastructure is built to serve, not disrupt, traditional financial intermediaries by enabling trading, custody and clearing of tokenised assets through a fully-regulated ecosystem.鈥�
Nik Mohamed Din Bin Nik Musa, director general, Labuan Financial Services Authority, adds: 鈥淲e are excited to see emerging technologies harnessed within a regulated environment, driving innovation in Islamic finance.
鈥淲e envisage that the new guidelines on Labuan Securities Token Offering would further spur the development of tokenised securities in Labuan. Leveraging on Labuan IBFC鈥檚 robust regulatory environment, Fusang Exchange鈥檚 innovation has provided the platform for listing of a unique tokenised structure cementing Malaysia's role in Islamic digital financial services.鈥�
He adds that the issuance bodes well with the recent Budget 2024, providing full tax exemption on Islamic 麻豆影视传媒 transactions by Labuan entities aimed at positioning the jurisdiction as an Islamic finance hub.
Kelvin Ung, president of Fusang, indicates that the firm will continue to issue similar tokenised securities backed by government-linked assets, as it believes demand for HQLA will continue in the current high interest rate environment.
It aims to revolutionise the Islamic investment landscape by providing investors with access to shariah-compliant high-quality liquid assets (HQLA).
According to the exchange, the tokenisation exercise is the 鈥榳orld鈥檚 first鈥� digitalisation of an institutionally-issued sukuk.
In addition, the digital sukuk represents the corresponding underlying sukuk issued by the International Islamic Liquidity Management Corporation (IILM).
Fusang led the tokenisation and listing exercise by using its proprietary Fusang Depository Receipt (FDR) structure to 鈥榳rap鈥� the underlying sukuk into digital form.
FDRs represent a 鈥榖eneficial interest鈥� in an underlying security, which can then be listed, traded and settled on the Fusang Exchange, the firm explains.
Commenting on the announcement, Fusang Exchange CEO Henry Chong says: 鈥淔usang鈥檚 next-generation tokenisation technology and standardised legal framework has created the world鈥檚 first truly global digital stock exchange.
鈥淥ur institutional-only digital infrastructure is built to serve, not disrupt, traditional financial intermediaries by enabling trading, custody and clearing of tokenised assets through a fully-regulated ecosystem.鈥�
Nik Mohamed Din Bin Nik Musa, director general, Labuan Financial Services Authority, adds: 鈥淲e are excited to see emerging technologies harnessed within a regulated environment, driving innovation in Islamic finance.
鈥淲e envisage that the new guidelines on Labuan Securities Token Offering would further spur the development of tokenised securities in Labuan. Leveraging on Labuan IBFC鈥檚 robust regulatory environment, Fusang Exchange鈥檚 innovation has provided the platform for listing of a unique tokenised structure cementing Malaysia's role in Islamic digital financial services.鈥�
He adds that the issuance bodes well with the recent Budget 2024, providing full tax exemption on Islamic 麻豆影视传媒 transactions by Labuan entities aimed at positioning the jurisdiction as an Islamic finance hub.
Kelvin Ung, president of Fusang, indicates that the firm will continue to issue similar tokenised securities backed by government-linked assets, as it believes demand for HQLA will continue in the current high interest rate environment.
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