Smart Sukuk as a Mechanism for Developing and Mobilizing Waqf Resources in the Age of Digital Technology

Waqf, an Islamic endowment dedicated to the welfare of society, holds significant potential for contributing to socio-economic development. However, many Waqf properties remain underutilized due to administrative, financial, and structural challenges. These issues hinder the transformative role that Waqf can play in addressing contemporary socio-economic challenges, particularly in many countries. Hence, the objective of this study is to explore innovative and sustainable approaches for revitalizing Waqf assets through the integration of digital technology particularly blockchain into Islamic financial instruments. By conducting alibrary-based qualitative research, this paper critically reviews existing literature on traditional Waqf models, Islamic financial instruments such as Sukuk al-Intifa’, Sukuk Musharakah, and cash Waqf-linked Sukuk, and emerging technological innovations including blockchain-based smart Sukuk. The findings reveal that while traditional Islamic financial instruments have made strides in improving Waqf utilization, they still face limitations related to governance, scalability, and operational transparency. In contrast, blockchain-integrated smart Sukuk offer a more robust, transparent, and decentralized framework for issuing and managing Waqf-based investments. This approach not only facilitates the transformation of idle Waqf properties into productive assets such as schools, hospitals, and commercial buildings but also creates employment opportunities and enhances asset value. As such, the Waqf-based smart Sukuk model emerges as a forward-looking and sustainable mechanism for mobilizing resources and fulfilling the core objective of Waqf: the promotion of long-term social and economic welfare. Keywords: Waqf, Smart Sukuk, Social Welfare, Development, Digital Technology