Blockchain zakat: An integrated financial inclusion strategy to manage Indonesia’s potential zakat funds

Abstract

The research aims to analyze the potential of using blockchain to promote integrated financial inclusion through Indonesian potential zakat funds. We use a qualitative approach (the business model canvas) as the analysis tool. We generate the data using the literature study. The essence of the zakat funds management implies that zakat assets should not be left idle. Further, greater zakat funds collected, managed, and distributed will deliver more benefits to mauquf alayh, greater divine rewards to the wakif, and greater funds received by nazir. Our results indicate that the zakat blockchain programs offer various benefits because blockchain facilitates more decentralized and borderless transactions. The benefits include achieving targets more effectively; avoiding overlap; developing zakat more systematically; monitoring more effectively in planning, organizing, actuating, and evaluating nazhir zakat; and contributing to short, medium, and long-term national socioeconomic objectives. In sum, we conclude that more decentralized and borderless blockchain-facilitated transactions potentially enhance Indonesian zakat funds' potential collection and utilization.

Revamping Tradition With Tech: Guiding Innovation in Zakat for Social Good

“…Cyber threats, such as hacking and data breaches, can have severe consequences, eroding the confidence of donors and beneficiaries. 33 Implementing state-of-the-art security measures, including encryption and regular security audits, is essential to safeguard zakat funds and data. The regulatory landscape for emerging technologies is still evolving.…”

“…Technology can streamline processes, enhance efficiency, and provide valuable insights, but it must always operate in harmony with the values and principles of Islamic ethics that underpin zakat. 38 The human touch in assessing individual needs and 33 38 exercising discretion remains irreplaceable. The digital transformation of zakat management should be inclusive, ensuring that all members of the community, regardless of their digital literacy or economic status, can participate and benefit.…”

What Drives Muslims' Zakat Compliance Behavior in The Profession? Evidence In Indonesia

“…Therefore, muzakki should not hesitate to trust the Zakat Management Organization as a place for distributing zakat. Zakat institutions in Indonesia have also innovated in zakat payment transactions to facilitate muzakki with the zakat blockchain program, which aims to increase transparency in the management of zakat funds in increasing trust (Millatina et al, 2022).…”

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“…Blockchain mengacu pada teknologi yang menyerupai buku besar di mana setiap transaksi dicatat, membentuk unit yang koheren. Sistem ini menggunakan tanda tangan kriptografi dan infrastruktur kunci publik yang memastikan proses perekaman yang aman (Millatina et al, 2022) Gambar 2. Skema Pengelolaan Dana Zakat Berbasis Blockchain Sumber: (Millatina et al, 2022;Rashid, 2018), dimodifikasi…”

“…Namun, ada peluang kelemahan teknologi blockchain tersebut dapat diatas karena saat ini teknologi tersebut masih terus dikembangkan (Omar & Khairi, 2021). Lebih lanjut, pemanfaatan platform blockchain yang optimal dalam pengelolaan dana zakat membutuhkan sinergi antar pemangku kepentingan (Millatina et al, 2022).…”