Bank Negara Malaysia (BNM) wants the Islamic finance industry to move beyond pilot projects and bring innovations such as tokenised sukuk into wider use.
Assistant Governor Mohamad Ali Iqbal made the call at the Islamic Financial Market Committee (IFMC) Roundtable 2026 on 19 October.
He highlighted Malaysia’s first tokenised sukuk and a pilot involving the settlement of tokenised sukuk using tokenised deposits.
The country has also introduced the world’s first blue sukuk to finance domestic water infrastructure projects.
BNM also recently launched SSDS+, a platform for issuing, recording and safeguarding tokenised bonds and sukuk.
Mohamad Ali urged the industry to build on these developments through wider adoption and repeat transactions rather than one-off projects.
BNM Sees Untapped Potential in Malaysia’s Sukuk Market
The central bank also wants to attract more international investors into Malaysia’s sukuk market.
Foreign investors hold approximately 8 percent of outstanding Malaysian Government Investment Issues (MGII), compared with 34 percent for conventional Malaysian Government Securities (MGS).
BNM sees opportunities to attract more investors through greater market transparency, internationally recognised sukuk structures and deeper secondary market liquidity.
Mohamad Ali also highlighted the industry’s transition to MYOR-i, Malaysia’s transaction-based Islamic benchmark rate, as part of efforts to strengthen market integrity.
Malaysia has already issued its first MYOR-i-referenced sukuk and introduced a MYOR-i-referenced Islamic profit rate swap.
With MYOR-i set to become mandatory on 1 July 2027, BNM is urging financial institutions to prepare for wider adoption across financing, sukuk and derivatives.
Malaysia recently retained the top spot in the Islamic Finance Development Indicator for the 14th consecutive year, ranking first among 140 countries.
Featured image: Edited by Fintech News Malaysia, based on image by ArthurHidden via Magnific
