The GCC is entering a transformative phase in Islamic finance, driven by rapid digitalisation and strong demand for innovative capital-raising tools. Tokenised sukuk, AI-powered Shariah-compliant solutions, and blockchain-based settlement mechanisms are beginning to reshape how Islamic bonds are issued, traded, and managed across the region. According to Fitch Ratings, these developments are set to play a significant role in the next stage of growth for the GCC's capital markets.

Momentum Builds for Tokenised Sukuk

Tokenisation - the process of converting sukuk into digital units recorded on a blockchain - allows investors to hold fractional ownership and access faster, more transparent settlement. This improves liquidity and opens the market to a wider range of investors.

Bashar Al Natoor, Managing Director and Global Head of Islamic Finance at Fitch Ratings, notes that GCC countries are already experimenting with digital approaches:

The UAE recently introduced its retail sukuk programme, following similar steps taken earlier by Saudi Arabia.

He emphasises that tokenisation is gaining traction, but adoption will likely progress gradually. The pace of the shift will depend on regulatory guidance, market readiness, and Shariah boards’ acceptance of new digital structures. “Do we have the green light to go ahead with these structures or not?” he asks - highlighting that tokenised sukuk are still untested at large scale.

ESG and Sustainability Sukuk: Slow but Steady Growth

Natoor also points to growing interest in sustainability-linked sukuk within the GCC. Although an immediate emergence of “blue sukuk” - similar to blue bonds used for ocean-related projects - is unlikely, the broader ESG trend is expected to strengthen.

The region’s robust pipeline and policy direction suggest that green and sustainability sukuk will continue to gain importance over the next few years.

Smart Sukuk: Digital Innovation in Practice

The shift toward digital sukuk aligns with strong DCM (debt capital markets) activity in the GCC. Fitch expects this momentum to extend into 2026, with outstanding issuances surpassing $1 trillion by Q3 2025.

Several GCC markets have already taken concrete steps:

Bahrain

One of the earliest adopters, Bahrain supported the creation of a blockchain-based platform by Inablr in 2021. Through the central bank’s regulatory sandbox, the startup enabled investors to buy sukuk and bonds with as little as $1,000.

United Arab Emirates

The UAE's retail sukuk programme allows individual investors to participate in government-backed T-Sukuk with a starting investment of AED 4,000 (~$1,089). In early 2025, Abu Dhabi Islamic Bank (ADIB) became the first local bank to launch a Smart Sukuk initiative, integrating digital issuance and blockchain-enabled features.

Saudi Arabia

The Kingdom has taken a proactive regulatory stance. The Capital Market Authority (CMA) and the Saudi Central Bank (SAMA) have introduced programmes to support digital sukuk financing and fintech innovations. Saudi venture capital is also moving into the space. In July, Tali Ventures, the investment arm of STC Group, led an undisclosed round in Tarmeez Capital, a fintech firm specialising in sukuk and debt instruments.

Global Issuance Outlook: Strong Growth Ahead

Fitch forecasts that sukuk issuance in 2025 will surpass 2024 levels. In the first three quarters of 2025 alone, approximately $80 billion in sukuk were issued across the core Islamic finance markets - the GCC, Malaysia, Indonesia, Türkiye, and Pakistan. This represents a 22% quarter-on-quarter and 89% year-on-year increase. With strong government support, rising investor demand, and advances in digital infrastructure, tokenised and smart sukuk are poised to become major pillars of the GCC’s future capital markets.