1. Alhamdulillah, it is an honour to participate in this year’s IIFM Sukuk Report Webinar. I extend my gratitude to the International Islamic Financial Market (IIFM) for organising this event and giving me the privilege of delivering the opening address. This annual publication is a cornerstone resource, reflecting the evolution and achievements of the global Sukuk market. I extend my heartfelt gratitude to the IIFM team and contributors for their dedication in delivering this invaluable resource for market participants and policymakers alike.

2. On behalf of Labuan Financial Services Authority, a proud founding member of IIFM, I commend the organisation for its outstanding contributions. With 19 industry standards published across sectors including liquidity management, hedging, and Sukuk, IIFM has significantly bolstered the Islamic finance industry, providing much-needed structure and guidance. These standards are vital tools that provide clarity and uniformity, helping to strengthen the foundation of Islamic finance globally.

Ladies and Gentlemen,

3. Today’s webinar is more than a routine discussion; it’s a celebration of Sukuk’s remarkable journey. From its humble origins as a simple financial certificate, Sukuk has evolved into a dynamic instrument that underpins large-scale infrastructure projects, sustainable initiatives, and financial inclusion. Its journey mirrors the growth of Islamic finance itself—steadfast, innovative, and deeply rooted in ethics.

4. In 2023, Islamic finance edged closer to an extraordinary milestone, with total assets nearing the US$5 trillion dollar mark. According to the ICD-LSEG Islamic Finance Development Report 2024, Islamic finance assets posted double-digit growth of 11 percent to come within touching distance of that mark, hitting US$4.9 trillion dollars in 2023. Sukuk alone achieved a stellar performance, growing by 9 percent with outstanding issuances surpassing US$863 billion dollars, driven by increased sovereign offerings, contributions from non-traditional markets, and a surge in green and sustainability Sukuk.

5. However, as much as we celebrate these achievements, we must also acknowledge the challenges that persist. The Sukuk market still faces hurdles such as limited geographical reach, fragmented standards, and complex issuance processes. To address these, I propose focusing on three critical areas: digitalisation, sustainability, and governance.

Digitalisation: Revolutionising Financial Markets

6. The first focus area is digitalisation. The rapid advancement of Artificial Intelligence (AI), blockchain, and tokenisation is reshaping the global financial landscape. AI, for instance, democratises investment by offering personalised financial advice at scale, making financial literacy and planning accessible to a wider audience. Blockchain, on the other hand, enhances transparency and security by creating immutable transaction records.

7. Additionally, tokenisation, powered by blockchain and smart contracts, transforms traditional assets into digital tokens, allowing for fractional ownership, increased liquidity, and seamless cross-border transactions. Together, these technologies are revolutionising the way financial services are delivered, offering new opportunities for both issuers and investors. The global market for tokenised assets, currently valued at USD186 billion dollars, is projected to exceed USD10 trillion by 2030. Yet, Islamic finance has only begun to scratch the surface of this immense potential. This gap presents a golden opportunity for growth and innovation.

Sustainability and Inclusivity: Shared Principles

8. Technology's revolutionary possibilities are continually being discovered. We need to use it to create a capital market that is accessible, inclusive, effective, and long-lasting. Islamic finance and sustainable investing share core principles, thus complementing each other as a means of both capital raising and investments. Sukuk can play a key role in funding environmentally and socially impactful projects, such as green Sukuk for renewable energy and social Sukuk for poverty alleviation.

9. Incorporating sustainability into Islamic finance helps address global challenges like climate change while fostering financial inclusion. By channelling funds into projects aligned with Shariah and ESG (Environmental, Social, and Governance) criteria, Islamic finance can drive sustainable development and promote resilience during financial crises.

Governance: The Backbone of Integrity

10. Finally, governance remains the cornerstone of any thriving financial system. As Islamic capital markets continue to grow, strong governance frameworks are essential for maintaining market integrity and investor confidence. Recent regulatory developments in countries like Bangladesh, Malaysia, and Tanzania demonstrate the global commitment to enhance Shariah governance and promote Islamic capital markets.

11. However, the digital finance space still lacks consistent regulatory standards, particularly for tokenised assets and digital Sukuk. Establishing clear and globally accepted guidelines will be crucial to unlocking the full potential of digital Islamic finance. This is where IIFM can play a transformative role. By introducing standards for Islamic digital assets and exchanges, IIFM can guide the industry towards a future that seamlessly integrates innovation with Shariah compliance. The creation of this standard represents a major step forward, and we hope that in the near future, more groundbreaking standards will emerge, further advancing the sector's digital transformation.

12. In line with this, allow me to briefly highlight Labuan IBFC’s efforts in driving innovation within the digital capital market. Since the launch of the Islamic Digital Asset Centre (IDAC) in 2022, Labuan IBFC has spearheaded several breakthrough initiatives. We have established a robust ecosystem, beginning with the establishment of digital exchanges powered by blockchain technology, the issuance of Shariah pronouncements on Islamic digital-based solution, and the development of guidelines for securities tokens. These milestones were followed by the successful tokenisation and listing of Shariah-compliant securities tokens, further solidifying Labuan IBFC’s position as a pioneer in innovative Islamic finance solutions and a catalyst for global financial inclusion.

13. And today, with much excitement, I am pleased to share that these Shariah-compliant securities tokens, known as RAMZ (meaning "token" in Arabic), have now achieved a combined market value of USD1 billion, Alhamdulillah.

Ladies and Gentlemen,

14. I have now come to the end of my speech. Digitalisation, sustainability, and governance will be pivotal in shaping the future of Sukuk and Islamic finance. These pillars, deeply rooted in the principles of Maqasid Shariah, ensure that our financial practices remain aligned with both ethical values and social responsibilities. I am confident that today’s discussions will not only deepen our understanding but also inspire collective action toward realising this shared vision.

15. As we proceed, let us be reminded of the timeless guidance in the Holy Quran, surah Al-Maidah verse 2 that reads:
"Cooperate with one another in goodness and righteousness, and do not cooperate in sin and transgression".

16. WaAllahu a'lam (Allah knows best). With that, I wish you all a productive and insightful session. Thank you.

Wabillahi tawfik wal-hidayah wassalamualaikum warahmatullahi wabarakatuh.