The pursuit of more efficient Islamic finance deployment has led Qatar-based Blade Labs into creating a multifunctional blockchain-based platform that automates the Shariah compliance of underlying assets for quicker investment transactions.
Founding CEO Sami Mian explained to IFN Investor that blockchain technology is most effective in sectors where there’s most friction, like Islamic investments – as there would be a lot of paperwork to wade through with several intermediaries and stakeholders involved.
“The transactions can be converted into smart contracts. The flow of funds can be tracked through the supply chain and traditional instruments can be replaced with digital instruments to make the end-to-end solution very seamless. We are essentially turning this into an asset tied with ownership rights.”
The biggest value proposition is this platform lowering costs with increased efficiency – by providing everything, including to both the asset issuer and secondary broker, all the contracts. “It’s just a plug-and-play process so you don’t have to figure out what all the necessary controls are.
“Using the Blade Labs platform, you can convert your conventional financing and investing transactions into Shariah compliant deals in a process that is automated and can be completed within a few minutes.”
Another issue Blade Labs will address is cash inefficiency when firms secure conventional loans – as this money sits in the account when not deployed yet and continues to incur bank charges. Sami said the platform can optimally deploy this stuck cashflow as Shariah investments in the interim.
Originally from Pakistan and having worked in the UK for 17 years in traditional finance at Deutsche Bank and Citigroup, mainly within the fixed income sector, Sami said the blockchain initiative was triggered in 2017 by queries from an Uzbekistan client.
Many SMEs in that Eastern European nation couldn’t obtain financing while some people with pools of capital couldn’t channel it to meet this funding need. This led to Sami looking into then-emerging blockchain technology as a way to rigorously filter different risk profiles and potential investments.
Admitting that crowdfunding and P2P began filling this financial niche while Blade Labs was perfecting its solution, Sami said the seven-year journey produced a platform proposition that was unique enough for the firm to be the first accepted into Digital Assets Lab “powered” by the Qatar Central Bank – aimed at fostering innovation and development in the distributed ledger technology space.
Blade Labs is also in talks with the Monetary Authority of Singapore to deploy its Islamic platform services in this island-state, taking advantage of the underlying distributed technology powered using strategic investments provided by Switzerland’s Hashgraph Association.
“We work with Aberdeen Asset Management as there’s a natural business development pipeline to large companies. We want to take this product mainstream and go global. Once you get all the regulatory hurdles overcome, this literally becomes a seamless cross-border transaction platform.”
