Latest news with #AAOIFI
Khaleej Times
2 days ago
- Business
- Khaleej Times
New Fatwa initiative ushers in new era for $5 trillion Islamic finance
Diamond Standard Co., the producer of the world's only regulator-approved natural diamond commodities, has secured a historic Fatwa, marking a landmark moment for the for $5 trillion global Islamic finance industry. Issued by Sheikh Dr. Mohamed Ali Elgari, a towering figure in Islamic finance, the new Fatwa endorses the use of diamond commodities as a Shariah-compliant solution for Islamic financial applications, particularly commodity Murabaha. Announced on May 29 in Dubai, the development promises to reshape the fast-growing Islamic finance sector, blending time-honoured ethical principles with cutting-edge technology to create a more efficient, transparent, and accessible financial ecosystem. Sheikh Dr. Elgari, a former professor and director of the Centre for Research in Islamic Economics at King Abdulaziz University, brings unparalleled authority to this endorsement. His extensive experience includes serving on Shariah boards for prestigious institutions like the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), Islamic Fiqh Academy, and major banks such as Abu Dhabi Islamic Bank, HSBC, and Standard Chartered. His Fatwa validates diamond commodities as a viable, Shariah-compliant asset, addressing longstanding challenges in Islamic finance where interest-based lending is prohibited. Islamic finance, governed by Shariah principles, requires transactions to be asset-backed, often through structures like commodity Murabaha, where a bank purchases an asset and sells it to a client at a markup, payable in installments. Historically, metals like nickel, copper, or aluminum have been used for these transactions, often as paper-based options or warrants. However, the introduction of AAOIFI Standard 62, which mandates physical delivery of the commodity's title to the borrower, has rendered these practices non-compliant. Additionally, gold, silver, and food commodities are prohibited for Murabaha, and metals incur high storage and delivery costs, creating inefficiencies for Islamic banks. Diamond Standard's solution is a game-changer. Its physical diamond commodities—coins and bars—are optimised sets of diamonds sealed with a wireless computer chip, ensuring transparency and uniformity. These commodities are fully deliverable, fungible, and tradeable on spot exchanges with daily prices reported by Bloomberg. The embedded chip enables instant title transfer and remote audits via a public blockchain, eliminating uncertainty and ensuring compliance with Shariah requirements. With custody and delivery costs up to 97 per cent lower than those for metals like copper, diamond commodities offer a cost-effective and practical alternative. This innovation has also been approved for settling futures and options regulated by the U.S. Commodity Futures Trading Commission (CFTC), with internal audits conducted by Deloitte, reinforcing its credibility. The Fatwa's issuance follows a request from a consortium of Islamic banks seeking a Shariah-compliant Murabaha solution with audited physical custody in a Muslim-majority country. Diamond Standard has responded by establishing a commodity holding and trading company in the GCC region, backed by $280 million in capital commitments. This entity will supply diamond commodities to Islamic financial institutions and trading platforms, creating a robust market for Murabaha transactions. It will also offer a listed fund for equity and Sukuk investors, enabling them to invest in diamonds as a hard asset with potential for value appreciation driven by both Islamic and broader investment demand. The initiative is expected to generate over 200 jobs in the GCC, spanning commodity operations, trading, custody, and Islamic finance roles, while boosting regional manufacturing, exports, and trade. To further enhance accessibility, Diamond Standard has partnered with the Dubai Multi Commodities Centre (DMCC) to provide audited, tax-free custody for its commodities. This strategic move, announced alongside the Fatwa, eliminates tariffs that would apply to diamonds entering markets like the US, benefiting Islamic banks and investors. The DMCC, a leading hub for global trade, is already recognised for its Shariah-compliant Tradeflow platform, which supports commodity Murabaha and aligns with AAOIFI standards, as certified by its Shariah Supervisory Board, which includes Dr. Elgari. This partnership underscores Dubai's growing role as a global Islamic finance hub, with the UAE's Islamic finance industry valued at over $285 billion in Q1 2025, according to Fitch Ratings. Cormac Kinney, founder and CEO of Diamond Standard, emphasised the transformative potential of this development: 'We set out to unlock $1.2 trillion of natural diamonds as an investment asset, but their dense value, paired with modern technology, has made them ideal for Islamic finance. We are honored to strengthen Islamic values through this innovation.' By fusing blockchain technology with the intrinsic value of diamonds, Diamond Standard is pioneering a new asset class that aligns centuries-old Shariah principles with 21st-century financial innovation. This breakthrough comes at a time of rapid growth for Islamic finance in the UAE and GCC. The UAE's new strategy, announced in May 2025, aims to double Islamic banking assets to Dh2.56 trillion by 2031 and boost Sukuk issuances to over Dh660 billion, reinforcing the region's leadership in the $2.44 trillion global Islamic finance industry. Diamond Standard's Fatwa-approved commodities position it at the forefront of this expansion, offering a scalable solution that enhances financial inclusion and efficiency. The impact of this Fatwa extends beyond finance, promising to democratize access to a $1.2 trillion natural resource while fostering economic growth in the GCC. By addressing compliance challenges, reducing costs, and leveraging blockchain for transparency, Diamond Standard is not only redefining commodity Murabaha but also paving the way for a more inclusive and innovative Islamic finance ecosystem.
Khaleej Times
5 days ago
- Business
- Khaleej Times
Diamond Standard announces Fatwa: The ideal solution for Islamic finance
Diamond Standard Co., producer of the world's only regulator-approved natural diamond commodities, on Thursday announced a historic milestone for the Islamic finance industry: the issuance of a fatwa by Sheikh Dr. Mohamed Ali Elgari, approving the use of diamond commodities to enable more efficient and more proper Islamic finance applications. Dr. Elgari is an esteemed authority in Islamic finance, having served as Professor and Director of the Centre for Research in Islamic Economics at King Abdulaziz University, and as Shariah board member for organizations including AAOIFI, Islamic Fiqh Academy, Abu Dhabi Islamic Bank, BlackRock, Citibank, Dubai Islamic Bank, Emirates NDB, HSBC, Standard Chartered and other banks worldwide. The Fatwa signifies a pivotal breakthrough for Islamic finance, where the lending of money with interest is prohibited under Shariah. Instead of directly lending money, the annual settlement for $5 trillion of global loan and bond transactions must be asset-backed, through structures like commodity Murabaha. Until now, commodity Murabaha used metals like nickel, copper, or aluminum. These assets were often created on paper, as options and warrants — a practice now in conflict with AAOIFI Standard 62, which requires the title to the commodity to be delivered to the borrower. Gold, silver, and food commodities are not permitted for Murabaha, and use of metals can result in substantial storage and delivery costs. In contrast, Diamond Standard commodities are a Shariah compliant, fully deliverable and fungible physical asset, with custody and delivery costs up to 97% less than that for metals like copper. After the issuance of Standard 62, a consortium of Islamic banks asked Diamond Standard to develop a commodity Murahaba solution, with audited physical custody in a Muslim majority country. Technology meets tradition Diamonds are a $1.2 trillion natural resource that was inaccessible to investors. Diamond Standard commodities — physical coins and bars — contain optimized and equivalent sets of diamonds, transparently sealed with a wireless computer chip. Since the commodities are all equal, they trade easily on spot exchanges, with a daily market price reported by Bloomberg. The wireless chip enables each commodity to issue an electronic title of ownership, recorded and traded securely on a public blockchain. This innovation supports instant title transfer and remote audit, and eliminates all uncertainty. The commodities are approved to settle CFTC-regulated futures and options in the U.S., and the commodity production is internally audited by Deloitte. GCC expansion To provide a standing pool of commodities to support Islamic applications, and enable investors to allocate to diamonds as a newly accessible natural resource, Diamond Standard is launching a commodity holding and trading company in the Gulf Cooperation Council (GCC) region. This entity will: ● Supply Shariah-compliant diamond commodities to Islamic finance institutions and trading platforms for Murabaha via an active market making desk. ● Offer a listed fund vehicle for equity and Sukuk investors seeking to invest in hard assets, expecting the value of diamonds to increase due to Islamic and investment demand. ● Anchor the development of new manufacturing, exports, and trading in the GCC region. This Diamond Standard commodity holding company has secured $280 million in capital commitments and is in discussions with GCC anchor investors to finalize the location of diamond importing, production and trading in the region. The initiative is expected to create over 200 new jobs, relating to commodity operations, import and export, marketing, trading, custody, and lending–as well as Islamic finance jobs. Tax free custody at DMCC Diamond Standard also announced that it had selected the Dubai Multi Commodities Centre (DMCC) as the venue to provide audited, tax-free custody for the Diamond Standard commodities. This will benefit Islamic banks and investors by avoiding the tariffs on diamonds entering the U.S. and elsewhere. Unlocking a New Future Cormac Kinney, Founder and CEO of Diamond Standard, stated: 'We intended to unlock $1.2 trillion of natural diamonds as an investment asset, but their dense value, combined with modern technology, has surprisingly made diamonds ideal for Islamic finance. We are honored to offer this asset to strengthen Islamic values.'
Trade Arabia
27-05-2025
- Business
- Trade Arabia
AI Hackathon showcases innovation in Islamic finance
The Islamic Development Bank Institute (IsDBI) has announced the winners of the first-of-its-kind Artificial Intelligence (AI) Hackathon in Islamic Finance, organised to showcase the potential of AI-powered tools to support the progress of the global Islamic financial industry. The awards were announced and presented to the winners during the 19th IsDB Global Forum on Islamic Finance on May 20 in Algiers, Algeria, on the sidelines of the IsDB Group Annual Meetings. As the Islamic finance industry evolves to meet the demands of a dynamic global economy, the practical adoption and harmonization of Financial Accounting Standards (FAS) - particularly across jurisdictions - remains a challenge. At the same time, Artificial Intelligence is revolutionizing how financial services are designed, delivered, and governed. Recognising this opportunity, IsDBI launched the AI Hackathon to explore how emerging technologies can strengthen the adoption of Islamic finance standards, particularly those issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The Hackathon focused on developing AI-powered solutions that make these standards easier to implement, more accessible, and globally aligned. Dr Sami Al-Suwailem, Acting Director General of IsDBI, presented the awards to the top three winners, namely: • First Place – Khilan Team • Second Place – Al Buraq Team • Third Place – BANKAI Team The winning projects stood out for their technical excellence, creative design, and potential for real-world application in the Islamic finance ecosystem. Dr Sami Al-Suwailem, stated: "This Hackathon reflects our commitment to advancing the Islamic financial industry using state-of-the-art technologies. We are proud to support the next generation of thinkers and builders shaping the future of Islamic finance through AI." The Hackathon is a pioneering initiative dedicated to applying AI in solving key challenges in Islamic financial services. It highlighted the role of AI in enhancing standardization, compliance, and innovation in the $4 trillion Islamic finance industry. The competition brought together talented students, developers, researchers, and entrepreneurs from around the world to co-create practical, Shariah-compliant digital solutions.
Finextra
27-05-2025
- Business
- Finextra
IsDBI announces winners of AI hackathon for Islamic finance
The Islamic Development Bank Institute (IsDBI) has announced the winners of the first-of-its-kind Artificial Intelligence (AI) Hackathon in Islamic Finance, organized to showcase the potential of AI-powered tools to support the progress of the global Islamic financial industry. 0 The awards were announced and presented to the winners during the 19th IsDB Global Forum on Islamic Finance on 20 May 2025 in Algiers, Algeria, on the sidelines of the IsDB Group Annual Meetings. As the Islamic finance industry evolves to meet the demands of a dynamic global economy, the practical adoption and harmonization of Financial Accounting Standards (FAS) - particularly across jurisdictions - remains a challenge. At the same time, Artificial Intelligence is revolutionizing how financial services are designed, delivered, and governed. Recognizing this opportunity, IsDBI launched the AI Hackathon to explore how emerging technologies can strengthen the adoption of Islamic finance standards, particularly those issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The Hackathon focused on developing AI-powered solutions that make these standards easier to implement, more accessible, and globally aligned. Dr. Sami Al-Suwailem, Acting Director General of IsDBI, presented the awards to the top three winners, namely: • First Place - Khilan Team • Second Place - Al Buraq Team • Third Place - BANKAI Team The winning projects stood out for their technical excellence, creative design, and potential for real-world application in the Islamic finance ecosystem. In his comment on this occasion, Dr. Sami Al-Suwailem, stated: "This Hackathon reflects our commitment to advancing the Islamic financial industry using state-of-the-art technologies. We are proud to support the next generation of thinkers and builders shaping the future of Islamic finance through AI." The Hackathon is a pioneering initiative dedicated to applying AI in solving key challenges in Islamic financial services. It highlighted the role of AI in enhancing standardization, compliance, and innovation in the US$4+ trillion Islamic finance industry. The competition brought together talented students, developers, researchers, and entrepreneurs from around the world to co-create practical, Shariah-compliant digital solutions. The Hackathon aligns with IsDBI's strategic objectives to drive innovation, create value through knowledge-based initiatives, and foster global impact in the Islamic finance sector.
Zawya
27-05-2025
- Business
- Zawya
First Islamic Development Bank Institute (IsDBI) Artificial Intelligence (AI) Hackathon Showcases Innovation in Islamic Finance
The Islamic Development Bank Institute (IsDBI) ( has announced the winners of the first-of-its-kind Artificial Intelligence (AI) Hackathon in Islamic Finance, organized to showcase the potential of AI-powered tools to support the progress of the global Islamic financial industry. The awards were announced and presented to the winners during the 19th IsDB Global Forum on Islamic Finance on 20 May 2025 in Algiers, Algeria, on the sidelines of the IsDB Group Annual Meetings. As the Islamic finance industry evolves to meet the demands of a dynamic global economy, the practical adoption and harmonization of Financial Accounting Standards (FAS) - particularly across jurisdictions - remains a challenge. At the same time, Artificial Intelligence is revolutionizing how financial services are designed, delivered, and governed. Recognizing this opportunity, IsDBI launched the AI Hackathon to explore how emerging technologies can strengthen the adoption of Islamic finance standards, particularly those issued by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). The Hackathon focused on developing AI-powered solutions that make these standards easier to implement, more accessible, and globally aligned. Dr. Sami Al-Suwailem, Acting Director General of IsDBI, presented the awards to the top three winners, namely: The winning projects stood out for their technical excellence, creative design, and potential for real-world application in the Islamic finance ecosystem. In his comment on this occasion, Dr. Sami Al-Suwailem, stated: "This Hackathon reflects our commitment to advancing the Islamic financial industry using state-of-the-art technologies. We are proud to support the next generation of thinkers and builders shaping the future of Islamic finance through AI." The Hackathon is a pioneering initiative dedicated to applying AI in solving key challenges in Islamic financial services. It highlighted the role of AI in enhancing standardization, compliance, and innovation in the US$4+ trillion Islamic finance industry. The competition brought together talented students, developers, researchers, and entrepreneurs from around the world to co-create practical, Shariah-compliant digital solutions. The Hackathon aligns with IsDBI's strategic objectives to drive innovation, create value through knowledge-based initiatives, and foster global impact in the Islamic finance sector. Learn more about the IsDBI Hackathon: Distributed by APO Group on behalf of Islamic Development Bank Institute (IsDBI). Social media handles: X (Twitter): Facebook: LinkedIn: About the Islamic Development Bank Institute: The Islamic Development Bank Institute (IsDBI) is the knowledge beacon of the Islamic Development Bank Group. Guided by the principles of Islamic economics and finance, the IsDB Institute leads the development of innovative knowledge-based solutions to support the sustainable economic advancement of IsDB Member Countries and various Muslim communities worldwide. The IsDB Institute enables economic development through pioneering research, human capital development, and knowledge creation, dissemination, and management. The Institute leads initiatives to enable Islamic finance ecosystems, ultimately helping Member Countries achieve their development objectives. More information about the IsDB Institute is available on
