Bank Negara Encourages Islamic Financial Institutions to Expand Use of Tokenisation Technology
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Bank Negara Malaysia (BNM) wants the Islamic financial industry in the country to move beyond the pilot stage of tokenisation. The central bank is encouraging the wider use of tokenised sukuk and digital settlement systems. This move is being made because Malaysia wants to expand innovation in Islamic finance.
Tokenisation refers to converting financial assets, such as sukuk, into a digital form that is stored and transferred through digital ledger technology. So far, several pilot projects have been carried out by various parties in Malaysia. However, BNM is of the view that these pilot efforts need to be translated into real use in the market.
Digital settlement, on the other hand, enables financial transactions to be carried out more quickly and transparently. In this way, investors and institutions can manage payments and transfers of assets more efficiently. Such systems are also expected to reduce the costs and time required for transactions.
Overall, this effort shows Malaysia's commitment to ensuring that the Islamic finance sector continues to grow in step with technological advancement. The industry is expected to continue discussions with BNM to determine the next steps.
Sources: Fintech News Malaysia
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