Bismillaahir rahmaanir raheem.
Assalam Alaiykum! Malaysia’s Islamic finance ambition continues to charge ahead by creating new programs to financially “tokenize” their digital transactions.
Malaysian Bank to Experiment with Blockchain Asset Tokenization
Malaysia continues to prove why they are a leading innovator when it comes to the Islamic finance industry, Central Bank Negara recently launched a 3-year initiative to test out how blockchain-based asset tokenization can streamline aspects within their financial system. Just in case you’re not familiar, blockchain tokenization is essentially representing real world assets like bonds, invoices, and loans on a digital distribution ledger that records a financial agreement between two parties; the payer an the payee.
The plan is to determine real-world utility. They’re very clear on not adapting technology just because it sounds cool and trendy. It needs to establish long term economic value. To do this they intend to use these ledger records as digital asset in itself that can be trade, transferred, or use as collateral. Allowing a wider range of financing accessibility to small and medium sized businesses and faster cash settlements between buyer/supplier.
The firms in this category are experiencing strong demand, but with a financing gap of RM 101 billion (USD $21.5 billion), they are restricted to a limited amount of growth. So this tokenized financing roadmap is designed to address it while maintaining stringent regulatory boundaries to verify technical feasibility.
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Barakallahu feekum,
Assalamu ‘Alaikum wa Rahmatullahi wa Barakatuhu
Yair Ahiyya
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