The global Sukuk industry has officially crossed the US$1 trillion mark in outstanding value this year, signaling a significant shift in the Islamic finance landscape. According to H.E. Dr. Muhammad Al Jasser, President of the Islamic Development Bank (IsDB), Sukuk are now firmly embedded within international financial markets and are helping promote a culture of responsible and transparent investment.
On 21 October, Dr. Al Jasser inaugurated the trading day at the London Stock Exchange to celebrate the launch of IsDB’s latest Euro Green Sukuk benchmark. The occasion aligned perfectly with the 2025 Global Sukuk Summit hosted in the UK’s major financial hub.
This event reflects the major transformation of Sukuk, once considered a specialized Islamic finance instrument, into an active participant in mainstream global capital markets.
A Fast-Growing Asset Class
Over the last 20 years, Sukuk issuance has expanded rapidly, surpassing US$1 trillion in 2025. This growth demonstrates rising investor appetite for financial instruments that are transparent, stable, and closely linked to real economic activity.
Sukuk financing is asset-based, allowing sovereign, supranational, and corporate issuers to raise funds for development projects such as infrastructure, education, telecommunications, healthcare, and more. Such structures safeguard against excessive debt accumulation and draw investors closer to the underlying economic use of funds.
Contrary to perceptions of complexity, Sukuk are built on clear asset identification, risk-sharing, and ethical investment values. Their reporting, documentation, and cash flow structures are compatible with the frameworks used in global fixed-income markets, making them easily accessible to conventional investors. Transparency around how funds are utilized has helped attract investors not only from Muslim-majority markets but also from Europe, North America, and other major economies.
Global Acceptance and Strong Foundations
Credibility has played a critical role in this development. Since 2003, IsDB has issued over US$55 billion worth of Sukuk while consistently retaining a top-tier AAA credit rating from leading agencies. This position strengthens pricing benchmarks and provides confidence for new entrants to the market.
Today, Sukuk are widely held by a broad range of investors — including central banks, fund managers, pension funds, and multilateral financial institutions across the globe. Every successful issuance strengthens international awareness and reinforces investor trust.
Sukuk are no longer viewed as an alternative financing option, but as a recognised component of the worldwide bond market.
Next Phase: A Stronger and Smarter Sukuk Ecosystem
To unlock even greater potential, industry leaders highlight several priorities:
1. Structural clarity and consistency:
Clear documentation standards and predictable architecture will reduce uncertainty for international investors and support smooth cross-border operations.
2. Enhanced market liquidity:
Although Sukuk issuance has grown considerably, secondary trading activity remains limited. Efforts are needed to build stronger market-making systems, develop repo facilities, and expand Sukuk index representation to support greater trading flexibility.
3. Purpose-driven innovation:
Green, social, and sustainability Sukuk are becoming key instruments for financing climate solutions, development projects, and infrastructure improvements, especially in emerging and low-income regions.
Asia and the Gulf continue to lead Sukuk development, and many African governments are now turning to Sukuk to finance progress in line with sustainability targets. Beyond traditional sectors, Sukuk are also emerging as a funding option for advanced industries like artificial intelligence.
The integration of digital issuance and blockchain settlement also holds promise for lower costs and wider investor reach, providing technological advancement is matched with strong regulatory safeguards.
IsDB’s Vision for the Future
The Islamic Development Bank remains committed to supporting sustainable development through Sukuk. The organisation plans to continue setting market standards, assist countries in building Sukuk infrastructure, and work closely with rating agencies and regulators to preserve stability and trust.
According to Dr. Al Jasser, the future of Sukuk is not just about growing a financial product — it is about encouraging economic progress, resilience, dignity, and shared prosperity across communities.