KUALA LUMPUR: Fusang Exchange has issued the world's first digitisation of an institutionally-issued sukuk.
This is through the tokenisation and listing of a digital sukuk representing the corresponding underlying sukuk issued by the International Islamic Liquidity Management Corporation (IILM).
The tokenisation is expected to revolutionise the Islamic investment landscape by providing investors access to shariah-compliant high-quality liquid assets (HQLA).
"The tokenisation and listing exercise was completely led by Fusang, utilising its proprietary Fusang Depository Receipt (FDR) structure to 'wrap' the underlying sukuk into a digital form.
"The FDR retains full transparency and certainty of investors' legal rights and adheres to Shariah standards set by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI)," it said.
ZICO Shariah Advisory Services acted as the Shariah adviser for the issuance of these ERC-20 compliant tokens, the leading and most popular Ethereum standard for token issuance.
Fusang Exchange chief executive officer Henry Chong said its next-generation tokenisation technology and standardised legal framework has created the world's first truly global digital stock exchange.
"Our 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," he said in a statement.
Chong added that Fusang is encouraged by the government's commitment to developing the Islamic financial market, aligning with the goals outlined in the 2024 Budget.
Meanwhile, Fusang president Kelvin Ung said its gives banks and brokers access to institutional Islamic investment products and greater global market distribution.
"This solves several legacy issues namely opening up of institutional markets and providing seamless digital access to investable assets.
"We will continue to issue similar tokenised securities backed by government-linked assets, as we believe demand for high-quality liquid assets will continue in the current high interest rate environment.
Fusang Exchange is a member-only network of regulated financial institutions.
It mirrors the operating structure of other non-digital stock exchanges, which facilitates the tokenisation, listing, trading, settlement, and custody of digital securities, all backed by real-world assets.
It is regulated and supervised by the Labuan Financial Services Authority, under the Ministry of Finance.