Tawf Finance makes rural sharia bank (BPRS) yield verifiable and investable. Stablecoin capital reaches Indonesian BPRS, with ZK proofs showing where funds sit and how profit is shared.
Indonesia has 174 sharia rural banks (BPRS) holding about Rp26 trillion in assets. They finance local MSMEs but are squeezed by high funding costs, limited reach, and ongoing consolidation. Investors outside their region cannot reach this financing, verify where funds sit, or see how profit is shared, and there is no clean rail for stablecoin capital to move in.
Tawf Finance is tokenization infrastructure for BPRS. A licensed bank originates and services a financing pool, and investors fund the pool with USDC from as little as $10. Tawf Labs is a technology company and does not issue Shariah rulings. Each partner BPRS follows its own Shariah board (DPS), and we bring that board's policy and attestations on-chain so investors can verify that a pool sits within the bank's approved Shariah scope. Each investment mints an on-chain receipt that is non-transferable by default. A verified-only transfer policy, using the same ERC-3643 identity registry as our deposito and sukuk tokens, is built in so a compliant secondary market can be switched on per pool once regulation allows. The bank services the financing and remits collections, and investors redeem principal plus their share of profit after Tawf's disclosed nisbah. Profit sharing follows mudharabah principles, and if a pool defaults, losses are shared under musyarakah rules. On testnet, the bank and its Shariah attestation are simulated for the demo, and the stablecoin is a test USDC.
What is built:
- Financing pool, deposito series, and sukuk contracts on Arbitrum Sepolia
- ERC-3643 identity gating, so one KYC (Didit) covers every product
- Proof of reserve checks before sukuk issuance
- Investor app with pools, portfolio, transactions, and a test USDC faucet
- Formal verification with the Certora Prover, with the bugs it found fixed
Tawf Finance is built by the team behind zkt.app, Tawf Labs zakat product under Tawf Foundation, which was a top 20 finalist at the PIDI DIGDAYA x Hackathon 2026 by Bank Indonesia and won Best Problem Solution Fit. All tokenization and settlement run on Arbitrum, currently deployed on Arbitrum Sepolia with Arbitrum One as the production target. Tawf Network, our own Layer 3 built on the Arbitrum stack, verifies the partner BPRS side. It records the bank balances where Tawf holds its real assets and the profit cash flows they generate, mirrored from the bank's core banking system, and anchors them on Arbitrum so deposito and sukuk tokens can only be minted against verified bank balances.
Before the hackathon: Our team's other product, zkt.app (a zakat product under Tawf Foundation), was a top-20 finalist and winner of Best Problem Solution Fit at the PIDI DIGDAYA x Hackathon 2026 by Bank Indonesia. Tawf Finance itself was not entered there. It began as a Solana prototype in April, moved to Arbitrum in August, and in September narrowed to financing sell-downs for Indonesian BPRS. In October, before this hackathon, we migrated the deposito and sukuk to ERC-3643 with proof of reserve, moved the pool onto the shared identity registry, added mudharabah profit sharing and musyarakah loss sharing, and ran formal verification with the Certora Prover across the vault, sukuk, deposito, receipt, and registry contracts. We fixed the bugs it found and redeployed on Arbitrum Sepolia. We also built a disbursement verification prototype and benchmarked the contracts on synthetic data.
During the hackathon:
1. Fixed a white screen on the investor pools page. The app read contract data by position instead of by name, so every field was undefined once the registry held deals. We fixed the mapping and added an error boundary that shows a recovery message instead of a blank page.
2. Made the KYC requirement visible on the pools page. The pool was already gated on-chain, but the page did not show it. Invest is now disabled for unverified wallets, with a notice and a clear error message.
3. Fixed the "Connect your wallet first" error on actions like Get test USDC. The app now shows a switch button when the wallet is on the wrong network and switches to Arbitrum Sepolia before sending a transaction.
4. Shipped all three fixes to the live app at tawf.finance.
Not currently raising. We initially funded the tokenization with capital from our team members. Our team's zakat product, zkt.app, was a top 20 finalist and Best Problem-Solution Fit winner at the PIDI DIGDAYA x Hackathon 2026 (Bank Indonesia). From the Arbitrum ecosystem, we seek infrastructure support for Tawf Network, our Layer 3 that verifies partner BPRS balances and cash flows and records proof of reserve for tokens issued on Arbitrum, along with introductions and market-access support to distribute our ERC-3643 tokens to compliant investors and partner BPRSs.