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Tokenised Islamic finance products: Shariah compliance meets digital innovation
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Tokenisation the representation of ownership interests and contractual rights as digital tokens recorded on distributed ledgers is increasingly intersecting with Islamic finance. The opportunity is practical; broader market access faster settlement improved transparency and audability and the potential to hard-wire compliance into product lifecycles. The challenge is equally clear. Structures must continue to satisfy foundational Shariah requirements prohibiting interest excessive uncertainty and speculation even as issuance custody and secondary trading migrate to digital rails. Across the Gulf Cooperation Council (GCC) region policymakers and market participants are moving beyond pilots to first-generation frameworks and transactions. Bahrain has adopted a stablecoin issuance and offering framework that embeds Shariah governance for Islamic-labelled products while in the United Arab Emirates (UAE) the new CBUAE law (Federal Decree-Law No. (6) of 2025) provides a statutory pathway for "currency in digital form" as legal tender issued...
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