Kuala lumpur: Malaysia aspires to become the global benchmark for regulation, innovation, and Islamic environmental, social, and governance (ESG) standards, as well as a center of excellence for Islamic fintech and climate-oriented sukuk by 2040, according to Deputy Prime Minister Datuk Seri Fadillah Yusof. He highlighted that the global financial landscape is evolving, and Islamic finance is positioned to lead a new frontier, with Malaysia’s direction aligned with global megatrends.
According to BERNAMA News Agency, Fadillah emphasized that Islamic finance will underpin Malaysia’s climate architecture, enabling transition, green and blue sukuk, and financing hydrogen, renewable energy, water security, and food systems. He stated that Malaysia will also lead in technology-driven Islamic finance, from Islamic digital banks to artificial intelligence-enabled Shariah advisory and blockchain-based sukuk platforms. Additionally, there are plans to modernize social finance by digitizing zakat, developing productive waqf, scaling micro-takaful, and strengthening community resilience.
Malaysia has already showcased its capabilities with the world’s first tokenized cash waqf sukuk, demonstrating that Islamic finance can be compassionate, innovative, and inclusive. The country leads in green finance through the Sustainable and Responsible Investment (SRI) Sukuk and Bond Grant Scheme, which covers 100 percent of eligible costs and is aligned with the ASEAN Taxonomy.
Furthermore, the deputy prime minister noted that Islamic banking contributes 46.6 percent of total national financing and is on track to surpass 50 percent, making Malaysia the first country where Islamic finance becomes the mainstream system. Islamic banking assets exceed US$260 billion, and the Islamic capital market stands at RM2.63 trillion, representing 62 percent of the total market. Malaysia also remains the world’s leading sukuk market, commanding between 40 percent and 50 percent of global issuances.
Themed ‘Strengthening Economies, Advancing Resilience and Sustainability,’ the two-day Kuala Lumpur Islamic Finance Forum (KLIFF) 2025 gathers more than 400 delegates from around the world to discuss the future of Islamic finance and investment opportunities. The forum will feature discussions ranging from regulatory innovation to sustainable and digital Islamic finance, highlighting the government’s strong support for advancing Malaysia as a global leader in Islamic finance.