Blockchain technology in zakat management system: potential and challenges in Malaysia

Purpose This study aims to provide an overview of Malaysia’s readiness to implement blockchain technology in zakat management. Although zakat institutions in Malaysia use technology in their management systems, the crisis of trust towards zakat institutions and the need for more comprehensive and consolidated asnaf data persist; thus, blockchain technology is proposed as a solution. Design/methodology/approach This research adopts a case study approach involving the majority of zakat institutions in Malaysia to explore the potential and challenges of facilitating the future implementation of blockchain technology in the zakat management system. Findings This research indicates that the prospects for implementing blockchain technology in the zakat management system are positive, given the government’s launch of the national blockchain roadmap, the potential of blockchain technology for identity verification and zakat institutions’ readiness to provide the necessary infrastructure. However, some challenges must be urgently addressed to ensure successful implementation, including regulatory challenges and blockchain literacy among zakat stakeholders. Research limitations/implications This paper serves as a guiding protocol for zakat institutions in Malaysia to implement blockchain technology in their management processes, anticipating that it will become necessary. Originality/value This study contributes to the field by integrating the resource-based view, maqāṣid al-sharīʿah and Islamic governance principles to evaluate blockchain adoption within Malaysia’s decentralised zakat system critically. Unlike earlier studies that primarily emphasised blockchain’s technical features, this research situates the discussion within a fragmented regulatory environment and grounds its analysis in stakeholder perspectives and national policy initiatives. In doing so, it advances a context-specific and theoretically grounded contribution to the literature on Islamic social finance and digital transformation in faith-based institutions.