Blossom Finance To Issue Blockchain-Based Bonds
Blossom Finance, an Indonesian financial company, plans to issue blockchain-based sukuks, an Islamic equivalent to bonds, Reuters reports.
It is expected that the bonds will be initially issued in a small amount, and the use of blockchain will reduce the cost of their emission, as well as attract increased attention from retail investors. This was announced by Khalid Howladar, chief strategy officer at Blossom Finance.
Blockchain will allow customers to buy sukuks much cheaper than it could have been previously. The profit sharing model will be applied, under which the maximum income can reach 10%, Howladar added.
Usury is prohibited in the Islamic society, so unlike traditional bonds which involve the payment of interest, sukuks can be considered tools resembling shares, where income is distributed from income.
In the future, Blossom Finance intends to use other blockchain-based bonds to finance social projects in the field of ecology and health.
For the first time, the Indonesian company introduced its blockchain platform called Smart Sukuk in May 2018. Developers used Ethereum smart contracts to standardize and automate the legal, accounting, and payment processes relating to the issuance of bonds.
As previously reported, the World Bank applied distributed ledger technology in the issuance of bonds.