The Optimization of Blockchain for Greater Transparency in Zakat Management

Abstract

Technology has developed rapidly in the last decade. Many business sectors have been affected by technological changes. They are required to adapt their business process to the latest technology. The digitalization of financial services became proof that technological changes have shifted the traditional services in financial institutions. One of the innovations developed in digital services today is blockchain technology, which was first developed in 2008 by someone with a pseudonym Satoshi Nakamoto. The uniqueness and advancement of the blockchain technology may be utilized and adopted by any institution, including zakat institution in managing zakat funds more accountable, effective, efficient, and transparent. Hence, the blockchain technology could assist zakat institution in improving its sound amil governance. Thus, the paper aims to elaborate further on the possibility, challenges, and opportunities for zakat institutions in adopting blockchain technology in their zakat administration.