The Islamic Finance Handbook: A Practitioner's Guide to the Global Markets

Chapter 33United StatesProgress and Challenges

Andrew M. Metcalf

Partner, Middle East and Islamic Finance Practice Group, King & Spalding

Isam Salah

Senior Partner and Global Head, Middle East and Islamic Finance Practice Group, King & Spalding

This article outlines the state of Islamic finance in the United States and the issues surrounding it. Although Islamic finance has a significant presence in the United States, the U.S. market still has substantial growth opportunities. Indeed, the U.S. market may be characterized by its gaps as much as by its achievements. Although there have been two U.S.-linked sukuk issuances, the sukuk market in the United States is not developed. There are no Islamic banks in the United States, and the U.S. takaful market operates on a minute scale.

There is only one financial institution known to the authors that offers a Shari'ah-compliant deposit product in the United States. However, the investment and retail initiatives that have occurred to date demonstrate that Islamic finance can be conducted in the United States within the existing legal and regulatory frameworks. As a result, the gaps in the current market may simply represent areas for potential development. In addition, the currently active components of the U.S. market should remain attractive for Shari'ah-compliant investors in the foreseeable future.

Islamic finance in the United States has developed along two parallel paths during the past 15 years. First, retail Islamic finance ...