(Reuters) - The research arm of the Islamic Development Bank plans to use blockchain technology to develop sharia-compliant products, aiming to support financial inclusion efforts across its member countries. The Jeddah-based Islamic Research and Training Institute said it had signed an agreement with local firm Ateon and Belgium-based SettleMint, with the first stage to focus on a technical feasibility study. The agreement is the latest effort to combine blockchain technology to tap demand from Muslim investors, with firms from Indonesia to Canada having already received sharia-compliant certification for their products. Involvement of the IDB, a multilateral development institution, could also encourage other fintech firms to incorporate Islamic finance to tap markets across the Middle East, Asia and Africa. Islamic finance follows religious principles such as a ban on gambling and outright speculation, but until now the sector has focused on traditional retail banking services. Blockchain involves a shared electronic ledger that allows all parties to track information through a secure network, removing the need for third-party verification. The IDB said such features would allow for instantaneous clearing and settlement of transactions and asset exchanges, while helping eliminate counterparty risk. Reporting by Bernardo Vizcaino; Editing by Gopakumar Warrier
The Islamic Development Bank 's research branch , the Islamic Research and Training Institute , aims to utilise blockchain technology to produce sharia - compliant financial products . The bank has agreed to work with digital solutions firm Ateon and blockchain technology firm SettleMint , with the first stage of the project being a technical feasibility study . The bank hopes to meet Muslim investors ' demand for blockchain - based products with sharia certification , as competition develops across the world . The move will also encourage financial firms to utilize Islamic finance in their considerations across the Middle East , Africa and Asia .