IsDBI secures US patent for blockchain to support Islamic FinTech

By Vriti Gothi

The Islamic Development Bank Institute (IsDBI) has been granted a new patent by the United States Patent and Trademark Office for a blockchain consensus mechanism designed to prioritise network participation over computing power or financial stake.

In PoU-based networks, participants validate other users’ transactions in exchange for having their own transactions verified. The model ties validation authority to actual network usage, rather than to specialised mining hardware, as in Proof-of-Work (PoW), or token holdings, as in Proof-of-Stake (PoS).

The approach aims to address several structural challenges associated with existing consensus mechanisms. By eliminating competitive mining, PoU reduces the energy-intensive dynamics commonly associated with PoW systems. It also seeks to mitigate wealth concentration risks seen in PoS environments by prioritising activity and utility over capital ownership. In addition, the framework merges the roles of users and validators, aligning incentives across network participants.

From a development finance perspective, the reciprocity model is intended to reduce the influence of external speculators whose primary motivation is validation rewards rather than underlying transaction activity. This design could make PoU particularly relevant for use cases involving financial inclusion, cooperative ecosystems, and community-based digital infrastructure.

“The Proof-of-Use mechanism is an important component of the Institute’s innovation portfolio,” said Sami Al-Suwailem, Acting Director General of IsDBI. “Our objective is to build a digital ecosystem to support inclusive growth and shared prosperity across member countries and communities. We are actively exploring strategic partnerships to capitalise on this innovative ecosystem, in line with the IsDB Group’s 10-Year Strategic Framework, which calls for enhancing Islamic digital financial services to ensure broader access to finance.”

The patent reflects a broader trend among multilateral institutions and public-sector innovation bodies exploring alternative blockchain architectures that emphasise sustainability, governance alignment, and real-economy utility. As distributed ledger applications expand across cross-border payments, trade finance, and digital identity, consensus models that balance efficiency, fairness, and regulatory compatibility are emerging as a strategic focus for the FinTech sector.