Fusang Malaysia Transforming Traditional Finance through Blockchain - Lists World's 1st Sovereign-Linked Tokenised Sukuk

How would you explain what Fusang does to those less familiar with the digital finance scene? What is the underlying technology to make this happen?
As a regulated digital asset exchange, Fusang aims to bridge traditional finance with blockchain innovation. Fusang enables the tokenisation of real-world assets, from real estate to private equity into fractional, tradable digital tokens. We provide issuers with enhanced liquidity and offer investors unprecedented access to new investment classes via our regulated and fully licensed ecosystem of financial intermediaries.

Fusang Exchange leverages blockchain benefits like 24/7 trading, transparency and smart contracts, while embedding compliance through a regulated network model.

Fusang is Asia’s first digital exchange for security tokens and crypto. What drives you to become Asia’s first, and what do you attribute this success to?
As CEO of Fusang, I've always believed in the potential for blockchain technology and digital assets to transform financial markets. Seeing the inefficiencies and barriers to entry in traditional finance, I felt compelled to drive change by pioneering regulated infrastructure that could bridge institutions to the possibilities of tokenisation.

Our success is rooted in the vision and expertise of our team, who built Fusang from the ground up to meet the highest regulatory standards while leveraging the latest innovations. In addition, by embedding compliance into our technology and offering a secure gateway to digital finance, we've attracted trust and momentum. But most of all, the team’s tireless commitment to creating a more inclusive and efficient digital capital market is what I attribute our success to thus far – and we’re just getting started!

Congratulations on listing the world's 1st institutional tokenised sukuk backed by a sovereign-linked instrument. What has been the most instrumental factor enabling you to achieve this before anyone else?
I credit our success to the team's expertise in digital asset innovation and the support from our Regulators at the Labuan Financial Services Authority.

By combining a thorough understanding of Shariah principles with cutting-edge tokenisation technology, we were able to structure a compliant sukuk token that bridges the benefits and possibilities of blockchain with the needs of Islamic investors.

Fusang has also been extremely lucky to work with like-minded entities invested in nurturing a next-generation Islamic bond market. Our joint integrated capabilities spanning regulation, blockchain, and Islamic finance were key to driving this breakthrough for the industry.

We strongly believe that the future of Malaysia’s leadership in Islamic finance is in digital Islamic financial innovation. The Malaysia Digital (MD) status awarded by MDEC also played a part in successfully issuing this tokenised sukuk.

What are the main benefits of digitalising a sukuk beyond being easily traded?
With the power of tokenisation and blockchain, the tokenisation of this Sukuk has proven that the distribution and accessibility of high-quality liquid assets can now span a broader range of investor classes. The promise of inclusion through fractionalisation is evidenced through the issuance of this tokenised sukuk. We are excited and motivated that the next significant tokenisation of an Islamic instrument may be retail accessible.

Our exchange, an institutional-only network of members, also provides additional benefits such as enhanced data integrity and transparency through distributed ledgers and improved liquidity via 24/7 trading and automation through smart contracts for processes like dividend payouts. Overall, Fusang brings securities markets into the digital age. As I have said, we are here to complement, not disrupt traditional capital market processes. The focus should be on something other than the technology, which serves to enable transparency, speed and distribution. Instead, importance should always be placed on the underlying asset quality.

How do you envision the growth of digital assets in ASEAN, and what areas will drive adoption?
With its youthful population and burgeoning startup ecosystem, ASEAN is ripe for digital disruption. Improved internet access and mobile connectivity open up blockchain possibilities, especially in emerging markets. The potential for financial inclusion among the underbanked through digital banking is immense. As regulators establish frameworks in Singapore, Malaysia, and beyond, we anticipate increased institutional participation. Fusang aims to facilitate innovation responsibly by collaborating with regulators across ASEAN, providing trusted access to blockchain technology's vast potential. It's a pivotal moment, and ASEAN is emerging as a leader in the future of digital assets due to its nimbleness as a collective group.

Recently awarded Malaysia Digital (MD) status, what's your 5-year plan for expanding Fusang's investment in Malaysia? How are you partnering with MDEC for growth?
Fusang Malaysia's key functions of blockchain research, compliance and client servicing will be based in Malaysia. In addition, we intend to roll out back-end blockchain solutions to the Exchange's network members, enabling all of its license holders to have quick access to enabling technologies. Our MD status will allow us to fast-track all our plans, and partnering with MDEC adds value and recognition.

What is your perspective on the quality of digital talent in Malaysia and Fusang's talent strategy?
Malaysia's tech workforce impresses with top-notch engineering and product talent. Their ability to deliver complex fintech solutions matches global standards. As a Malaysian, I am proud that our talent pool stands out for adaptability, creativity and a collaborative spirit.

Fusang's focus on innovative tech like blockchain and smart contracts resonates with professionals eager for cutting-edge solutions. I am pleased that our expansion plans offer growth opportunities for local talent, making Fusang an employer of choice for blockchain professionals. In addition, our agile work culture is designed to empower teams to deliver in an open and inclusive environment.

As ESG gains prominence, how does Fusang integrate it into operations?
ESG principles and practices are integral to Fusang's culture, and tokenisation is one of the best tools to advance ESG-related aims. We believe the synergy between fintech, blockchain and ESG principles creates the necessary momentum towards the complete and holistic adoption of the UN Sustainable Development Goal.

How do you see Malaysia's potential as a destination for blockchain and Islamic digital economy investors?
With its forward-thinking regulators, flourishing Islamic finance sector, and world-class talent, Malaysia is poised to become a global leader in Shariah-compliant blockchain innovation. Our tokenised sovereign-backed Sukuk is a testament to Malaysia's capability to bridge Islamic wealth, technological innovation, and leadership in Islamic finance. The alignment of (decentralised finance) solutions with Islamic principles positions Malaysia to spearhead an ethical digital economy. I have no doubt the nation possesses all the elements necessary to attract investors seeking blockchain and Islamic finance innovation.

In action ... Henry Chong, Executive Director of Fusang Malaysia, speaking at the ASLI Banking & Finance Summit 2023.

Fusang Malaysia Sdn Bhd, an MD status company, is the blockchain research and development arm of the entire Fusang Group of companies, spanning offices in Malaysia and Hong Kong. The key commercial relationship for Fusang Malaysia is with Fusang Exchange Ltd, a digital stock exchange powered by blockchain technology and smart contracts. Fusang Exchange, fully licensed and regulated by Labuan Financial Services Authority, recently tokenised and listed the world's first sovereign-backed institutional sukuk based on the underlying sukuk issued by the International Islamic Liquidity Management Corporation.