Image Courtesy: Canva

Islamic Finance

Fusang Exchange issues world's first institutional tokenized sukuk

Fusang Exchange, a digital stock exchange operator, has announced the tokenization and listing of a digital sukuk.

The digital asset represents a corresponding underlying sukuk issued by IILM (International Islamic Liquidity Management Corporation).

Fusang Exchange said in a statement that this tokenization exercise is the world’s first digitization of an institutionally issued sukuk and is expected to revolutionize the Islamic investment landscape by providing investors access to Shariah-compliant high-quality liquid assets (HQLA). 

IILM, an international organization dedicated to addressing liquidity management challenges for Islamic financial institutions worldwide, serves as the program administrator of the underlying sukuk.

Fusang Exchange employed its proprietary Fusang depository receipt (FDR) structure to convert the underlying sukuk into a digital form.

ZICO Shariah Advisory Services acted as the Shariah adviser for the issuance of these ERC-20-compliant tokens. 

The FDRs are akin to American Depository Receipts (ADRs) and Hong Kong Depository Receipts (HDRs) and represent a beneficial interest in an underlying security.

These FDRs can be listed, traded, and settled on the Fusang Exchange. They are fully redeemable for the underlying IILM sukuk and are secured by third-party independent custodians, ensuring uniform legal rights and custodial arrangements for all parties involved.

Henry Chong, CEO of Fusang Exchange, said: “Fusang’s next-generation tokenization technology and standardized 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 tokenized assets through a fully regulated ecosystem.”

Fusang Exchange operates as a member-only network of regulated financial institutions, mirroring the operating structure of non-digital stock exchanges.

The platform facilitates the tokenization, listing, trading, settlement, and custody of digital securities, all of which are backed by real-world assets.