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South Asia gains spotlight as Islamic animation hotspot

From animation studios in Islamabad to YouTube channel operators in Dhaka and Maharashtra, South Asia is emerging as one of the most dynamic frontiers for Islamic children’s animation.

Long overshadowed by Western and East Asian content giants, the region is now cultivating its own ecosystem - one rooted in Islamic storytelling, cultural authenticity, and rapidly evolving digital tools.

Pakistan offers innovation amid economic instability

Pakistan has long been a wellspring of animation talent, producing some of the region’s most influential Islamic and socially conscious children’s content.

The country’s modern animation trajectory is often traced back to Burka Avenger, the internationally acclaimed animated TV series that blended superhero storytelling with themes of girls’ education and social justice.

“Over the past few years, many strong animation studios have emerged in Pakistan, largely driven by the success of Burka Avenger,” Abbas Saleem, a Pakistan-based transmedia specialist, and producer of Burka Avenger, tells Salaam Gateway.

“The show helped spark a new generation of animators and paved the way for numerous animation projects that followed,” adds Saleem, who operates across games, animation, and UX comics.

Pakistan has also played a pioneering role in animation technology – becoming the first nation to produce an animated film built using Unreal Engine, the 3D creation platform developed by US-based Epic Games.

“This milestone was achieved by 3rd World Studios in Islamabad, which went on to create two films built using this tool,” says Saleem.

“At the time, using Unreal Engine - one of the most widely used engines in game development -for animation was revolutionary. Today, studios around the world are adopting it for animation and visual effects, making it a pioneering achievement for Pakistan.”

More recently, the country has witnessed experimentation at the intersection of faith and artificial intelligence. In September 2025, Pakistan’s Jinn TV – a new-media channel rolled out last July - launched Zayd & Fatima, the country’s first AI-powered Islamic cartoon series. Designed for early childhood audiences, the show introduces children to everyday prayers, patience, gratitude, and kindness through playful storytelling.

Jinn TV, which attracted more than two million views on YouTube by December, reportedly plans to expand to India, Bangladesh, and other regional markets.

Alongside studios and platforms, independent creators are reshaping the landscape - often bypassing traditional broadcasters altogether. YouTube has become a critical launchpad for Islamic themed children’s animation, allowing creators to reach global audiences with modest resources.

Pakistan-based 3D artist Dr. Hina Mahmood launched the Jannah Kids YouTube channel last August, using relatable, family-based storytelling to introduce Islamic values.

“I want children to learn good manners, the lives of the Prophets, stories of the companions, teachings from the Qur’an and Hadith - and understand Islamic knowledge in a simple, enjoyable form,” Mahmood tells Salaam Gateway.

Her long-term vision includes interactive tools, augmented reality-supported lessons, and partnerships with Islamic scholars.

Her work prioritizes realism and emotional familiarity. “I try to keep the cartoon world very close to real life,” she says, “where children can see their own homes, families, and daily routines reflected in the characters.”

Beyond moral storytelling, Jannah Kids integrates early childhood education within meaningful narratives. “The experience becomes like an online school for kids. This blended approach makes our content accessible and relatable even for non-Muslim families,” adds Mahmood.

How Bangladesh can leverage demand to achieve scale

Bangladesh has also become a fertile ground for Islamic children’s animation, particularly on YouTube. Channels such as AMP Young Stars, Islamic Cartoon Bangla, and Prio Cartoon Tube are gaining traction by delivering Islamic storytelling in Bengali.

“I’ve loved cartoons since childhood, which led me to take a course in animation and eventually start creating cartoon videos for YouTube,” Mahbubur Rahman, founder of Prio Cartoon Tube tells Salaam Gateway.

“As I explored the platform, I noticed that while there was an abundance of children’s cartoons, very few focused on educational storytelling,” he adds.

“That gap inspired me to create educational animated content. Because Islam is a complete way of life, I chose Islamic values as the foundation for these stories.”

Launched in 2016, Prio Cartoon Tube currently has close to one million subscribers. Its videos, so far 121 in number, have attracted more than 296 million views, despite being produced exclusively in Bengali - a fact Rahman sees as both a limitation and an opportunity.

“At present, we produce Islamic cartoon videos only in Bengali but expanding into other languages would allow us to reach a much wider audience, making Islamic knowledge more accessible and helping educate more people through engaging, values-based storytelling.”

“The number of Islamic cartoon channels in South Asia remains very small, despite the region’s strong potential,” he says. “Our most-watched video has surpassed three million views, and it is produced entirely in Bengali.”

India’s Islamic animation push

Meanwhile, India - home to some 172 million Muslims and the world’s third-largest Muslim population after Indonesia and Pakistan - is also emerging as a gold mine for Islamic-centred animation aimed at young audiences.

“There is definitely a growing demand for Islamic cartoons in India,” Qari Ziya Ur Rahman Farooqui, founder and director of Kids Message, India’s first 3D Islamic cartoon channel, tells Salaam Gateway.

“This interest is driven by several factors: rising parental awareness about children’s digital content consumption, concerns about inappropriate or faith-compromising themes in mainstream cartoons, and a stronger desire to preserve Islamic identity from an early age.”

Launched in 2020, Kids Message was founded with a clear mission: to nurture the faith of the next generation through modern digital storytelling. Since its debut, the channel has amassed more than 206,000 subscribers.

Its 761 videos have collectively drawn nearly 39 million views - a sign of robust appetite for values-driven children’s programming in a crowded online market.

“The inspiration for the channel came from observing how deeply children are attached to mobile phones,” says Farooqui.

“Keeping them completely away from screens has become extremely difficult... Instead of discouraging screen time, we decided to provide a meaningful alternative - Islamic 3D cartoons that are engaging, entertaining, and rooted in authentic values.”

To maximise reach, Kids Message maintains an active presence across multiple social media platforms, positioning itself squarely within digital ecosystems where children and families already spend considerable time.

A market coming into focus

With nearly 650 million Muslims spread across South Asia - more than any other region in the world - the geography represents a vast and largely untapped audience for Islamic animated content.

Yet despite its traction, scaling up remains a challenge. Funding constraints continue to limit the scope and ambition of Islamic animation in India.

“What is currently missing in the market is large-scale, professionally produced Islamic 3D animated content from India. This field requires significant funding, time, skilled teams, and technical infrastructure. Because of the high cost and long production cycles, very few organizations are willing to invest in it,” explains Farooqui.

Taken together, developments across South Asia point to a sector on the cusp of maturation. While challenges remain, the building blocks are firmly in place: creative talent, scalable digital platforms, and a massive, underserved audience hungry for meaningful children’s content.

As studios professionalize, creators collaborate across borders, and investors take notice, Islamic children’s animation in the region is shifting from niche to necessity, reshaping how young Muslims view themselves and their faith.

04 Mar 2026

Insight

Islamic Finance

Islamic fintech and venture capital: underfunded or unscalable?

Islamic fintech does not lack narrative or ambition.

There are two billion potential Muslim customers globally. Islamic finance assets exceed $6 trillion. Markets across the GCC and Southeast Asia combine strong banking penetration with rising digital adoption. Diaspora markets like the UK remain structurally underserved.

The Global Islamic Fintech Report 2025/26 estimates the size of Islamic fintech at $198 billion, projected to reach $341 billion by 2029. There are 484 Islamic fintech firms worldwide, concentrated largely in alternative finance, wealth management, payments, deposits and lending. Digital assets, takaful and social finance remain less developed but show momentum.

Yet despite these tailwinds, Islamic fintech still represents just 1.5% of the global fintech market.

The opportunity and growth are clear, but capital remains selective.

Not always a venture case
Venture capital is often the first route founders consider when raising funding. But Abdul Haseeb Basit, co-founder and principal of Elipses, suggests the sector needs to think more carefully about fit.

“Mostly, Islamic finance products require patience and development. They don't have the same turnaround times as conventional venture investments, so it requires a type of patient capital that perhaps isn't venture capital.”

Islamic finance is rooted in asset-backing, risk-sharing and structured governance. That does not always align neatly with venture capital’s expectation of rapid scaling and defined exit timelines.

Hazem Ben-Gacem, founder and chief executive of BlueFive Capital, agrees that venture capital is only one tool. His firm led Mal’s $230 million seed round, backing what it describes as the world’s first AI-native Islamic digital bank. The investment demonstrates that institutional capital is prepared to move at scale when conviction is strong.

“VC works well for high-growth, scalable platforms, which is why we led this round for Mal,” he says. “But Islamic finance is fundamentally rooted in asset-backing, risk-sharing and ethical allocation of capital. That aligns more naturally with revenue-based financing, sukuk, or even crowdfunding in certain contexts. We need a hybrid approach.”

Wahed offers another example. The US-based Islamic robo advisory platform has raised multiple rounds to expand across the US, UK and MENA markets. Licensing friction did not deter investors because the underlying business model scaled and governance structures were clear.

These examples show Islamic fintech can attract venture funding. The issue is that only specific models fit the venture profile.

Going beyond faith positioning
Islamic fintech combines digital infrastructure with principles such as asset-backing, transparency and risk-sharing. Shariah compliance matters to customers. Investors, however, assess propositions differently.

Khalid Howladar, managing partner at advisory and venture firm Acreditus, argues that targeting underserved Muslim communities can be commercially logical at the outset.

“As long as your project can make money serving this segment, venture capital will follow,” he says.

However, Howladar adds a crucial caveat. “Focusing on community is not enough. Just being Islamic is not enough. You need to be solving a problem, ensuring product market fit.”

Basit echoes this point. He believes founders need to broaden their lens. “Most of the development today has been around structuring the products in a Shariah-compliant way. Now the focus needs to shift to their merits as an investment product more holistically.”

To scale, Islamic fintech must demonstrate that it delivers better financial outcomes, not simply compliant alternatives.

The firms attracting capital tend to compete on commercial fundamentals first, with Shariah embedded in governance rather than positioned as the sole differentiator.

Product diversity and scalability
The Global Islamic Fintech Report highlights the heavy concentration of firms in retail-facing segments such as payments and wealth management. These areas are important but can be geographically constrained and highly competitive.

Greater product diversity is needed, such as digital asset rails aligned with asset-backing principles; capital markets technology; embedded Islamic finance within broader ecosystems; SME financing platforms with scalable underwriting models. These types of propositions are more likely to scale across markets and attract institutional capital.

Ben-Gacem argues Islamic fintech remains underfunded relative to its structural opportunity.

“The challenge has been twofold,” he says. “First, many solutions have been reactive - digitising conventional Islamic products rather than reimagining them. Second, the investor base has been too narrow. We see this as a gap in perception, not performance. What’s been missing is conviction at scale.”

Investors have shown greater willingness to back regulated infrastructure than narrowly positioned consumer applications. That distinction is likely to shape future deal flow.

A shallow capital escalator
Even where early-stage capital exists, scaling remains uneven.

Basit describes what he calls a weaker “capital escalator”. Incubators and angel networks are active. However, later-stage funding remains limited.

He notes that corporate venture participation from Islamic banks is not yet widespread, and IPO pathways for high-growth technology firms in many OIC markets are still developing.

Without visible late stage exits, institutional LPs hesitate to allocate capital to specialised Islamic fintech funds. Without larger funds, scaling beyond Series A or B becomes difficult.

“There needs to be a whole-of-ecosystem approach when it comes to funding a company from inception to exit,” adds Basit.

“We haven't seen much later-stage scaling. We have seen some exits, for example CoinMENA was a trade sale. That is probably likely to be the most common outcome for most Islamic fintechs.”

Governance and interpretation risk
Another friction point lies at the intersection of Shariah governance and venture structuring.

Amjad Hussein, partner at law firm K&L Gates in Qatar, notes that founders sometimes focus on Shariah compliance at the product level while relying on conventional funding instruments at the equity level.

“Early funding continues to be raised through conventional instruments that are drafted in a debt-like or return-protective nature,” he says. “Convertible notes, for example, are typically framed as debt that converts into equity and often include an interest component, which is an obvious friction point in a Shariah context.”

Hussein argues that Shariah governance should be embedded from the outset, with “instrument choice, conversion mechanics and investor protections aligned from the first term sheet”.

At the same time, he cautions against overcorrecting.

“The aim is not to reinvent venture economics, but to express them in equity-forward terms that are commercially familiar and Shariah-compliant.”

Consistency is key
Islamic fintech benefits from favourable structural trends. Demand is robust. Regulatory clarity in markets such as Malaysia and parts of the GCC is improving.

But venture capital is not unlocked by narrative alone. It requires scalable business models, disciplined governance, predictable regulatory planning and credible exit pathways.

Islamic fintech has demonstrated that capital can be raised. The challenge is not promoting an outlier. It is making it the norm.

02 Mar 2026

Insight

Islamic Finance

How Malaysia’s governance model is offering a blueprint to regulate Islamic fintech

While the Islamic fintech ecosystem in Malaysia thrives on innovation backed by a consumer-centric vision, its landscape overseen by an institutional framework where responsibilities are clearly outlined has emerged as a winning strategy.

Bank Negara Malaysia (BNM) oversees Islamic banking and sets standards for Shariah compliance across financial institutions, while the Securities Commission Malaysia (SC) regulates capital markets, digital asset exchanges and peer-to-peer (P2P) financing platforms.

The SC’s Shariah Advisory Council provides an additional layer of formal oversight, ensuring that innovation remains tied to recognised jurisprudence.

This structure has given digital platforms a clearer rulebook as opposed to what exists in several other markets. It also reflects a long-standing Malaysian principle: fintech is an extension of the financial system, not a parallel space outside of it.

Programmes such as the SC’s FIKRA ACE Accelerator further integrate Islamic fintech into the capital markets ecosystem, offering structured pathways for start-ups rather than a purely experimental environment.

At a policy level, cooperation between the SC and the Islamic Development Bank has also positioned Malaysia as a reference point for knowledge exchange among the Organisation of Islamic Cooperation (OIC) states.

Aizuddinur Zakaria, founder and principal at HAL Fintech Advisor and Adjunct Professor at University College TATI, tells Salaam Gateway that Malaysia has built “one of the most extensive Shariah governing systems in the world,” pointing to the formal Shariah governance framework introduced by BNM in 2010, which embeds structured Shariah risk management, review, research and audit functions within Islamic financial institutions.

He adds that Malaysia’s role as a financial hub, hosting institutions such as the Islamic Financial Services Board has helped shape regulatory thinking beyond its borders, cascading across Southeast Asia.

A practical example: P2P under Shariah rules
The efficacy of Malaysia’s governance model can be seen in its regulated P2P financing sector. Platforms such as microLEAP operate under SC licensing, with Shariah-compliant notes structured around trade-based contracts rather than interest. Shariah advisers review structures, while credit assessment, risk management and disclosure obligations mirror those of conventional platforms.

The model illustrates how Malaysia has embedded Islamic contracts into digital intermediation without foregoing regulatory expectations. Returns to investors are framed as profits from underlying transactions — such as Murabahah sales — rather than fixed interest, and Shariah compliance is treated as a supervisory matter rather than a mere marketing feature.

Influence beyond Malaysia
The Malaysian regulatory handbook offers vital lessons on how to integrate Shariah boards, financial regulators, and digital market supervision within one system for interoperability and greater synergy.

Regulatory bodies and policy experts across Muslim-majority markets, particularly Southeast Asia, are taking a leaf out of Malaysia’s regulatory book. Neighbouring Indonesia, for example, has expanded its fintech regulatory sandbox under the Financial Services Authority (OJK) and is seeking closer coordination between financial supervisory and Shariah certification bodies.

Othman Al Duwaiki, Shariah adviser and compliance manager at Oman-based EthisX, tells Salaam Gateway that Malaysia’s Shariah governance framework has been “widely referenced and, to a significant extent, adopted or adapted across multiple jurisdictions, influencing Shariah governance practices beyond its borders."

However, regulatory approaches remain “largely country-specific in practice,” Zakaria says, noting that legal systems, institutional structures and Shariah interpretation still diverge, with the GCC markets often aligning more closely with AAOIFI standards while Southeast Asia following regulator-led dual frameworks.

That is to be expected as influence rarely means copy-and-paste. Indonesia’s legal structure and religious authority framework differ, and thus, the regulatory adaptation reflects local priorities around consumer protection and systemic stability.

Another example in the GCC is that of the UAE, which hosts both tightly controlled onshore regulation and more experimental regimes within financial freezones such as the Abu Dhabi Global Market (ADGM). Here, digital assets and tokenised securities are recognised under dedicated frameworks.

These environments often move faster on financial technology, but their Shariah governance structures are not organised in the same centralised manner as Malaysia’s.

Saudi Arabia and Bahrain, meanwhile, pursue their own regulatory paths, reflecting different balances between innovation and prudential caution.

Technical blueprint
Malaysia’s contribution to Islamic fintech is therefore less about exporting a template and more about demonstrating how digital finance can be integrated into a pre-existing Shariah governance system. The framework illustrates how fintech can operate under formal Shariah supervision without detaching from mainstream regulation.

Islamic fintech is still young, and its regulatory direction is far from settled. What Malaysia offers is a case study in sequencing: building institutional oversight first and allowing digital innovation to develop within it.

Whether other jurisdictions move closer to that model will depend on their own financial architecture and policy choices, but the Malaysian blueprint does offer key governance takeaways worthy enough to emulate.

19 Feb 2026

Insight

Islamic Finance

Top 10 sustainability-linked Islamic finance transactions in 2025

There has been a marked increase in sustainability-linked Islamic finance in 2025, mobilizing real capital and channeling funds into climate change mitigation and major sustainable development projects.

Unlike green financing that is exclusively used to finance or refinance new and/or existing green projects, sustainability-linked Islamic financing is designed to incentivize the borrower's achievement of ESG (environmental, social, or governance) targets through pricing incentives.

A borrower’s performance is measured using sustainability performance goals, benefitting on achieving targets or facing financial repercussions otherwise. This adds an additional layer of accountability that values impact than intent.

Here’s a list of ten sustainability-linked Islamic financing transactions in 2025, ranked on the following four factors:

1. Transaction size
2. The application of proceeds for climate change mitigation and/or adaptation, social infrastructure or sustainable development
3. Adherence to the principles of the International Capital Market Association, listed exchanges or third-party verification
4. Transactions that were issued, listed, or substantially enhanced in 2025

2025: Ten sustainability-linked Islamic financing transactions

1. Indonesia Sovereign Green Sukuk Wakala ($1.1 billion)
The green sukuk, issued by Indonesian government, is being used to fund sustainable infrastructure projects and climate initiatives. It is set to be listed concurrently on the Singapore Exchange and Nasdaq Dubai.

2. Dubai Islamic Bank – Sustainability-linked financing sukuk ($1 billion)
Dubai Islamic Bank completed the pricing of its first sustainability-linked sukuk. Its first issuance raised a value of $1 billion for a maturity period of five years. This is pegged to the accomplishment of specific sustainability goals, such as supporting the UAE’s Net-Zero 2050 Initiative.

3. Oman Electricity Transmission Company sukuk ($750 million)
Funds from Oman's first US dollar green sukuk will be directed toward its electricity transmission infrastructure that aligns with climate transition goals.

4. Sobha Realty sukuk ($750 million)
Lxury real estate developer, Sobha Realty's first green sukuk is funding energy-efficient real estate projects. This highlights how sustainability frameworks are being assimilated into the real estate industry.

5. Tabreed's inaugural sukuk ($700 million)
UAE-based district cooling company Tabreed has issued a $700 million sukuk that will be applicable for the construction of low carbon district cooling systems, illustrating the key influence of the energy efficiency factor. The company owns and operates 91 plants, including 76 in the UAE, five in Saudi Arabia, seven in Oman and one each in Bahrain, Egypt, and India.

6. Aldar Investment Properties – sukuk ($500 million)
The sukuk is a refinancing of real estate assets that have been certified for sustainability. Issued by an Abu Dhabi-based real estate investment management platform and subsidiary of Aldar Properties, the sukuk signals a growing compatibility between Islamic finance and green property investment.

7. Emirates Islamic – Sustainability-linked financing sukuk ($500 million)
This transaction marked a significant step regarding expansion of sustainability-linked structures used in Islamic banking, with an emphasis on strengthening Emirates Islamic’s commitment to achieving the UAE’s Net Zero 2050 ambitions.

8. OMNIYAT sukuk ($500 million)
The green sukuk issued by Dubai-based real estate developer OMNIYAT proved instrumental in enabling sustainable real estate projects, as well as marking a major foray for a private sector developer in the green Islamic capital markets sector.

9. Binghatti Holding's sukuk ($500 million)
Dubai-headquartered Emirati real estate development company, Binghatti Holding, issued its first green sukuk, increasing the pool of issuers in sustainable Islamic finance and helping fund projects that support environmental objectives.

10. Islamic Development Bank's sukuk (EUR 500 million)
The issuance of funds in the new sustainable finance framework of multilateral development bank IsDB aims to channel funds to eligible green development projects.

What do these transactions reveal?
What is evident is the ever-growing size of sustainability-linked sukuk in the Islamic finance sector.

Several of these issues have surpassed the half billion-dollar mark, suggesting that institutional investors have begun to view the sustainability-linked sukuk campaign not as a pilot project, but as mainstream issuances.

Another new trend is accountability. Rather than project-specific funding, sustainability-linked instruments bind the funding terms to the level of sustainability goals and their achievements.

The Gulf region continues to lead, in particular the UAE and Oman. Transactions in Southeast Asia also reveal momentum building in and around that region.

What does this means for investors?
For an investor, these transactions imply several significant messages, such as Islamic sustainability-linked financing is becoming more investment-worthy.

Additionally, the range of industries diversifying is growing, lowering concentration risk. And finally, alignment with global sustainable finance standards makes incorporating these instruments into comprehensive ESG initiatives relatively easy.

16 Feb 2026

Insight

Islamic Finance

Digital gold and the return of asset-backed finance in Islamic fintech

Islamic Fintech has expanded rapidly over the past decade, with early growth driven by payments, remittances, and digital access to financial services. As the sector matures, attention is shifting from distribution-led expansion toward balance sheet integrity, asset backing, and governance.

This reflects wider global developments, where reserve transparency, verification, and consumer protection are receiving increased scrutiny. Within this environment, digital gold is emerging as a practical retail-facing expression of asset-backed financial design aligned with established Shariah principles.

Asset backing has long defined Islamic finance, grounded in tangibility, ownership clarity, and disciplined risk-taking. In practice, however, many early Islamic Fintech models mirrored conventional digital finance, where asset exposure was indirect or implicit. Recent developments across digital assets, tokenization, and reserve-backed instruments have renewed emphasis on explicit asset anchoring and verification. These shifts place Islamic finance in closer alignment with evolving regulatory and market expectations.

Gold occupies a distinct position within Islamic jurisprudence as a ribawi asset governed by clear rules on exchange, ownership, and delivery. Unlike many real-world assets now being explored for digital representation, gold benefits from a mature global market infrastructure. Refining standards, custody practices, pricing benchmarks, and audit conventions are widely established, reducing structural ambiguity. These characteristics make gold comparatively easier to translate into digital ownership models without altering its underlying financial or Shariah attributes.

Digital gold models apply modern financial infrastructure to physical gold through fractional access, digital records, and institutional custody. While technology improves accessibility and operational efficiency, it does not alter the requirement for legally enforceable ownership of the underlying asset.

In Islamic finance, this distinction is central. Structures that confer ownership of physical gold differ materially from arrangements that provide contractual exposure to gold prices. The credibility of digital gold therefore rests on ownership mechanics rather than interface or distribution.

Governance frameworks determine the integrity of digital gold structures. Core considerations include asset segregation, custodian independence, audit scope and frequency, and transparency of redemption processes. Digital ledgers and automation can support traceability, but they do not replace legal title or physical verification. From both regulatory and Shariah perspectives, emphasis is increasingly placed on continuous assurance and clear disclosure rather than one-time validation.

Digital gold is often discussed alongside gold-backed stablecoins and other tokenized commodities. While these instruments share asset-linked characteristics, their objectives and risk profiles differ. Stablecoins typically prioritize transactional liquidity, while digital gold savings emphasize ownership and capital preservation. Tokenized commodities introduce further considerations around transferability and enforceability, reinforcing the need for precise classification across asset-backed digital finance.

Despite its structural alignment with Shariah principles, digital gold faces ongoing challenges. Governance standards vary across jurisdictions, consumer understanding of asset-backed claims remains uneven, and regulatory treatment of pooled custody arrangements continues to evolve.

As Islamic fintech enters its next phase, the role of digital gold will be shaped less by technological capability and more by the robustness of ownership, governance, and verification frameworks. Whether the ecosystem can converge on common benchmarks for asset-backed retail finance remains an open question with material implications for the sector.

The Global Islamic Fintech Report 2025/26 can be downloaded here

04 Feb 2026

Insight

Islamic Finance

Decentralized Islamic finance: A new frontier in digital finance

Today, fintech and decentralized finance (DeFi) applications are revolutionizing the financial world, pushing it into uncharted territory. While Fintech often integrates with traditional financial institutions, decentralized finance focuses on blockchain and distributed ledger technology (DLT) based solutions. Both areas are being carefully examined through the lens of Islamic finance, as experts explore the potential opportunities they may offer.

Starting with Bitcoin, the debate over the compatibility of cryptocurrencies with Islamic finance continues to evolve, sparking diverse interpretations. Scholars and economists often hold contrasting views, leaving Muslim investors in a gray area between halal (permissible) and haram (forbidden) investments. However, it seems inevitable that digital assets will become a central part of financial management in the future. Therefore, this issue should not be reduced to a simple halal-haram dichotomy but should instead be examined from multiple angles to highlight its permissibility or prohibition.

Conceptualized as “Decentralized Islamic Finance”, there are both Islamic finance applications and traditional practices deemed permissible in this space. To address this complexity, the following categorization can be applied:

Decentralized finance applications based on Islamic finance principles
Islamic finance-compliant decentralized finance applications
Islamic finance-compliant decentralized finance applications integrated with traditional finance
Decentralized finance applications integrated with traditional finance
Traditional finance applications compliant with Islamic finance principles

According to this framework, the first three categories — Islamic finance-based (1), Islamic finance-compliant (2), and Islamic finance-compliant decentralized finance integrated with traditional finance (3) — fall under the umbrella of Decentralized Islamic Finance. All applications emerging within this scope can be evaluated under this framework.

Since decentralized finance began gaining traction in 2016, Islamic finance-compliant digital assets, exchanges, and technology solutions have started to emerge. However, due to the nascent nature of the field, unclear business models, and sustainability challenges, many initiatives have struggled to survive. Early examples include FICE adab solutions, Qintar token, hada dbank, Bayan token, ateon, biocoin, noorcoin, IslamiChain, and ZakatTech. While these projects generated excitement, most failed to sustain themselves. A few, like OneGram, continue to operate passively. This is a common trend in the broader blockchain economy, where many projects fade quickly.

Today, several decentralized finance applications offering Islamic finance services are active and fall under the first category of my framework. Examples include Marhaba DeFi, Islamic Coin, Qitmeer, Takadao, and Cryptozakat. Additionally, there are initiatives that, while not fully decentralized, provide blockchain-based solutions or prepare for new innovations. Tokenization of real-world assets also fits into this ecosystem.

Layer 1 blockchain platforms like Bitcoin, Ethereum, and Solana, along with their digital assets, are also considered compliant with Islamic finance. Notably, this assessment comes from the Shariyah Review Bureau (SRB), a body of Islamic scholars. They have stated that these digital assets do not inherently conflict with Islamic finance principles.

Thirdly, there are Islamic finance-compliant service providers, such as exchanges facilitating digital asset trading. Platforms like Fasset, Rain, and Coinmena fall into this category, enabling broader access to digital assets.

To evaluate decentralized finance applications, an assessment canvas with three main pillars can be used:

Purpose and Design, Technical Infrastructure, and Governance. Each pillar includes specific building blocks:
Technical: Infrastructure, digital asset, smart contract structure, and interoperability with other chains and applications.
Governance: Execution, Shariah advisory board, official establishment and representation, and oversight.

This canvas provides a structured framework for assessing the compliance and viability of decentralized finance applications within the Islamic finance context.

Decentralized finance is poised to play an increasingly significant role in our financial lives. Given the alignment of blockchain’s transparency, reliability, and distributed nature with Islamic finance principles, it is crucial to address this topic systematically. Ignoring this space could deprive Muslim communities of a transformative technology and its benefits.

The rise of asset-backed digital assets and global investment opportunities presents a unique chance to enhance the sustainability and reach of Islamic finance. Neglecting this potential could result in significant missed opportunities.

As the potential of Decentralized Islamic Finance becomes clearer, I believe all stakeholders will grow more enthusiastic about its possibilities. Until then, we will continue refining the ecosystem map and advancing this transformative field.

The Global Islamic Fintech Report 2025/26 can be downloaded here

03 Feb 2026

Insight

Islamic Finance

Which trends are dominating the global Islamic fintech space?

The Global Islamic Fintech Report 2025/26 identified 30 notable Islamic fintech companies for 2026, recognized for their pioneering efforts across the $198 billion global fintech industry.

The companies were selected based on several criteria, including funds raised, innovation in solutions development, market expansion, product diversification, and demonstrated growth (e.g., diversified product offerings and user growth).

Abdul Haseeb, co-founder and principal at Elipses: “The Notable 30 Islamic Fintech companies are recognised for their contribution to advancing the sector over the past year. They are also an indicator of which geographies and sectors are trending. We expect these companies to be the leaders in a growing sector, continuing to drive innovation.”

Several key highlights and trends have emerged from the 30 Islamic fintech analysis. These are as follows:

UAE is at the forefront of Islamic fintech growth

Ten out of the 30 notable Islamic fintech companies are based in the UAE, highlighting the country’s strong commitment to building leadership in Islamic fintech.

Notable funding rounds include Mal ($230 million), and Alaan ($48 million). Advanced regulatory frameworks around open finance, crypto, and real-world assets (RWA) are further strengthening the ecosystem.

The UAE also benefits from a strong talent pool, supported by deep funding pockets and robust regulation from state institutions such as the UAE Central Bank, DFSA, and ADGM. In the Global Islamic Fintech Index, the UAE ecosystem rose by one position to rank 3, overtaking Indonesia.

”What we are seeing in the UAE is an ecosystem shifting from ‘fintech hub’ to ‘institution-grade infrastructure’, where progressive rulebooks, capital depth, and execution capacity combine to make innovation scalable," said Najmul Haque Kawsar, senior consultant and project manager at DinarStandard.

"As the industry converges on stablecoins and CBDCs for settlement, tokenisation for real assets, and Shariah governance as an operating system rather than a badge, the UAE’s moves, such as tokenisation sandboxes, its CARF commitment, and the Central Bank’s Digital Dirham programme, signal a clear intent to lead the next chapter of Shariah-aligned digital finance.”

Fintech is accelerating Pakistan’s financial inclusion

Pakistan has emerged as a growing Islamic fintech ecosystem, with three out of the 30 notable companies originating from the country.

The GIFT Country Index also shows Pakistan rising by two positions to rank 8.

Although financial infrastructure is still developing, the ecosystem shows strong potential in driving financial inclusion for SMEs and underserved markets. Abhi has served more than 750,000 employees through earned wage access and, in 2025, secured $25 million in Series B funding and expanded into Saudi Arabia. Haball has served over 8,000 SMEs, processing more than $5 billion in payments and $110 million in financing, and last year secured a $52 million funding round.

Digital assets are galvanizing institutional investment momentum

Major developments signal rising integration of digital assets into the Islamic finance landscape. Examples include Rain’s $250 million Series C at a $1.95 billion valuation, CoinMENA’s acquisition valued at up to $240 million, Fasset’s stablecoin initiatives, and Ruya Bank launching Shariah-compliant Bitcoin trading.

Robust regulation - particularly in the UAE and Bahrain - is attracting innovation and accelerating the development of Shariah-compliant digital asset ecosystems.

Values-based investing is at a tipping point

With growing customer expectations around values-aligned investing, several Islamic investment startups are moving beyond basic Shariah compliance. Notable highlight is Wahed, which pioneered Shariah-compliant UCITS ETFs with additional value-based screening, including considerations around human rights and social justice, signaling a broader shift toward ethical investing within Islamic finance.

To view the entire 30 notable fintech list, click here.

To download our Global Islamic Fintech Report 2025/26, click here.

03 Feb 2026

Insight

Islamic Finance

Digital assets and the next frontier of Islamic finance

Much of the public conversation around Islamic finance and digital assets, cryptocurrencies and blockchain has historically been framed around a single, narrow question: “Is crypto halal?”. While understandable, this framing is incomplete. It treats digital assets as a monolithic product rather than as what they truly are: a neutral financial infrastructure.

A more meaningful and intellectually honest question is not whether digital assets are permissible by default, but whether they can be designed and governed to fulfil the Maqāṣid al-Sharīʿah, the higher objectives of Islamic law.

Islamic finance is not about legal form alone. Its foundation lies in outcomes: justice, transparency, protection of wealth, and the prevention of harm. When viewed through this lens, well-designed digital asset systems are not only compatible with Islamic finance, but in some cases better aligned with its objectives than the conventional interest-based financial system.

The Maqāṣid Framework
The Maqāṣid al-Sharīʿah articulate five core protections: faith (dīn), life (nafs), intellect (ʿaql), lineage (nasl), and wealth (māl). In finance, these translate into ethical constraints (no ribā, gharar, or maysir), protection against exploitation, informed consent, intergenerational stability, and secure property rights. Justice (ʿadl), the removal of harm (rafʿ al-ḍarar), and ease (taysīr) act as cross-cutting principles.

When assessed against these objectives, the shortcomings of the modern financial system become apparent. Opaque balance sheets, excessive leverage, interest-based debt cycles, financial exclusion, and concentration of wealth directly undermine the spirit of Islamic finance, even if transactions are compliant in form.

Digital Assets as Ethical Infrastructure
Blockchain and digital assets introduce several characteristics that are particularly relevant to the Maqāṣid.

Transparency and truthfulness are foundational. On-chain systems allow real-time visibility into asset backing, issuance, ownership, and transaction history. This directly supports the protection of intellect (ḥifẓ al-ʿaql) by reducing deception and information asymmetry, while enabling Sharīʿah boards to audit compliance continuously rather than retrospectively.

Protection of wealth (ḥifẓ al-māl) is enhanced through clear property rights and reduced counterparty risk. Self-custody, immutable records, and programmable settlement lower the likelihood of unjust loss, fraud, or arbitrary confiscation. When digital tokens are fully asset-backed, such as tokenized real estate, commodities, or sukuk, they align closely with Islamic principles of tangible value and risk-sharing.

Justice and fairness (ʿadl) are supported through programmable finance. Smart contracts enable profit-and-loss sharing, predefined fee structures, and automatic enforcement of contractual terms without discretionary abuse. This is especially relevant for Mushārakah and Muḍārabah-based structures, which have historically struggled to scale due to operational complexity and trust deficits.

Removal of harm (rafʿ al-ḍarar) is another key area. Excessive leverage, hidden derivatives, and maturity mismatches are major sources of systemic harm in traditional finance. On-chain systems allow leverage to be constrained at the protocol level and risks to be monitored in real time, reducing moral hazard and financial contagion.

From Theory to Practice, From Speculation to Purpose
These principles are not merely theoretical. Emerging platforms are beginning to apply the Maqāṣid framework directly to digital financial infrastructure. Fasset, for example, has been designed around asset-backed tokenization, and regulated access to real-world investments across emerging markets. By focusing on tangible assets, clear ownership rights, and compliant market structures, such models demonstrate how digital assets can move beyond speculation and towards genuine economic utility.
None of this implies that all digital assets are Sharīʿah-compliant. Speculation, manipulation, and unbacked token issuance clearly violate Islamic principles. But these are design failures and not inherent features.

Digital assets and blockchain technology are the next frontier for Islamic finance - enabling purpose-built digital financial infrastructure that explicitly serves the Maqāṣid al-Sharīʿah. When approached correctly, digital assets are not a departure from Islamic finance but its next evolutionary step.

The Global Islamic Fintech Report 2025/26 can be downloaded here

02 Feb 2026

Insight

Islamic Finance

Where Islamic fintech grows next

Over the last decade, Fintech has moved into the mainstream of financial services and consumer behavior. The Fintech market revenue is projected to grow fivefold to $1.5 trillion by 2030, with growth driven in part by digital access expanding faster than traditional offerings.

Islamic Fintech is emerging along with this broader momentum, to address the increasing demand for Shariah compliant and ethical products. The global Islamic Fintech market 198 billion in 2024/25 and is projected to reach USD 341 billion by 2029, growing at 11.5% per year. Yet it still represents a small share of global Fintech activity. That gap highlights where the next phase of Islamic Fintech growth is likely to come from.

In any conversation related to technology, it’s difficult to escape the ‘AI’ hyperbole and the lofty expectations set by marketers. But practically speaking, AI does provide a golden opportunity to build and iterate quickly and address structural issues. Operational scaling has long been a challenge in Islamic finance. Due to bespoke products, manual Shariah reviews, lack of data and high compliance costs. AI, if used responsibly, can address many of these issues, from supporting alternative credit scoring for underserved SMEs, automating Shariah monitoring, and improving risk management. The value is simple, AI can offer lower cost, faster decisions, and wider access, while preserving ethical considerations.

While Bitcoin and cryptocurrencies have had a characteristically frenetic 2025, the enterprise use of the underlying blockchain technology and real-world asset tokenisation continues to mature. Global financial giants such as Blackrock and JP Morgan are investing heavily, spurred on by regulatory tailwinds from the U.S. Islamic finance relies on clear ownership, asset-backing, and trust. Blockchain fits naturally here. Sukuk, commodities or receivables can be issued and managed more efficiently through distributed ledgers. This reduces cost, improves settlement, and democratises access for smaller investors. Progress has continued through 2025, Fasset, the Islamic Finance Super App, is utilising blockchain to offer fractional tokenised equities, blockchain-payments, and develop the first ‘stablecoin-based Shariah compliant’ banking model, following the securing of a provisional banking license. In parallel, firms such as Blade Labs are exploring ways blockchain can be used to improve efficiency, transparency, and auditability in Islamic finance contracts.

Many Islamic financial products sit outside daily economic flows. Users must seek them out. That makes distribution expensive and slow. Embedded finance changes this. Shariah compliant BNPL or micro-takaful could sit inside e-commerce platforms, mobile apps and digital transaction flows. According to a report by Dealroom and ABN AMRO Ventures, the global embedded finance market value is expected to reach $7.2 trillion by 2030. There is a clear opportunity to provide accessible Islamic financial services, to address the growing shift to integrated financial services.

Across successive Global Islamic Fintech Reports, access to capital and navigating regulatory requirements is consistently highlighted as the main hurdles by Islamic Fintech founders. One practical option to address both constraints is to focus on Business-to-Business (B2B) or Business-to-Business-to-Consumer (B2B2C) models. BCG expect these markets to grow by over $700 billion in annual revenues by 2030. Banks are increasingly cultivating innovation through investments, acquisitions, and partnerships, in order to stay relevant. Traditional Islamic banks already have capital, the regulatory permissions, and customer distribution in place. Fintechs are nimble, they can build new products and deploy far faster than banks typically can internally. In an increasingly digital and innovation driven environment, where capital and regulatory access is still paramount, strategic partnership delivers meaningful value for incumbents and Fintechs alike.

Over the last couple of years, the Middle East and North Africa (MENA) region has moved towards the center of the global Fintech market. Today, the region is home to more than 1,000 Fintech companies, with multiple unicorns and growing capital inflows. A young, mobile-first population, strong government backing, and investment in digital infrastructure have helped Fintechs to scale quickly across payments, lending, and digital banking. Qatar continues to push ahead in Fintech and offers a supportive environment ideal for innovation. This momentum is reflected in investment activity: in 2024, Fintech accounted for a significant share of Qatar’s venture funding, with over 500% year-on-year growth. Qatar Financial Centre (QFC) plays a central role in shaping this ecosystem. Through its Fintech friendly framework, QFC offers company incorporation with 100% foreign ownership, fast licensing, and a common-law environment familiar to international founders.

QFC also works closely with Qatar Central Bank, Qatar Fintech Hub, and Qatar Development Bank, giving founders access to coordinated pathways that combine sandboxes, pilots, funding support, grants and partnerships. Qatar offers practical conditions for building new financial products. The digitally engaged population, a leading Islamic finance sector and dedicated Fintech support programs provide a space for innovation, particularly for Islamic Fintech use cases, to test and scale.

Islamic Fintech is poised to enter the next phase of growth. Emerging technologies such as AI, blockchain, and open banking will enable new products and lower barriers to entry. As supportive regulatory frameworks and ecosystem support matures, more players are likely to enter the market. This will intensify competition, but also create opportunities for partnership, collaboration, and selective consolidation. Over time, these trends should lead to stronger products and wider access to Shariah compliant financial services.

The Global Islamic Fintech Report 2025/26 can be downloaded here

02 Feb 2026

Insight

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