Blockchain Knowledge Awareness and Intention to Adopt a Technology for Zakat Transactions

Abstract

Blockchain represented the second era of internet and has the potential in addressing various challenges towards strengthening the economy including Islamic finance. Zakat institutions, which are non-bank financial institutions, supplement bank operations in carrying out tasks for economic growth aimed at eradicating poverty, promoting social justice, and distributing revenue fairly. Although the immutability, security, and transparency of blockchain may entice Islamic financial institutions to adopt it for their operations, adoption, and behavioural intention of halal blockchain digital wallet in non-bank financial institutions like zakat institutions, are still unknown. Islamic non-bank financial institutions like zakat are under pressure due to the expanding deployment of blockchain technology today and the growing awareness of its potential. The purpose of this research is to examine the feasibility of using a survey instrument from pilot study to determine the level of blockchain knowledge awareness among zakat payers. The study employs a quantitative method using a survey questionnaire and a simple random sampling was administered among zakat payers to achieve the purpose. The questionnaires were distributed at random to zakat payers. The results show that internal consistency among the items was high. Majority of respondents were completely unaware of cryptocurrencies because they have never transacted with it before, and even though majority of the respondents had a fair amount of understanding about blockchain technology and cryptocurrencies, they had no experience carrying out bitcoin transactions. The instruments from this study can be utilised for future actual survey on a larger scale.

Blockchain Use Case in Islamic Social Finance

“…Another study by Salleh et al (2022) Finally, Kunhibava et al (2021) examine the use of blockchain technology in ṣukūk issued for social purposes, focusing on the SmartSukuk introduced by Blossom Finance. They highlight the challenges facing blockchain ṣukūk across legal, regulatory, Sharīʿah and blockchain-related dimensions, emphasising the potential of blockchain technology to streamline fund mobilisation and distribution while reducing the need for intermediaries.…”