Use of Blockchain Technology in addressing the issues in Zakah Collection and Disbursement in Pakistan: A Conceptual model

Abstract

Purpose: One of the five pillars of Islamic law is zakah¯ , which applies to all qualified Muslims and demands that they contribute a portion of their wealth for benefit of the Muslim community. Methodology: This study relies on a conceptual approach to describe the role of blockchain technology in zakah¯ organizations. Findings: This study explores the potential of blockchain technology and smart contracts to revolutionize zakah¯ management. By developing a conceptual model, it aims to establish how these tools can enhance transparency, build Muzzaki trust, and ultimately simplify the distribution of zakah¯ funds to deserving recipients. Significance: Zakah¯ institutions’ transparency, competency, and trustworthiness in zakah¯ management are the most important characteristics that influence public willingness to pay zakah¯ through zakah¯ organizations. As a result, incorporating blockchain technology into zakah¯ management can track the status of zakah¯ funds and make the distribution and transaction of funds more transparent. Practical Implications: The use of blockchain technology would ensure that zakah¯ should reach directly to real zakah¯ recipients in an efficient manner. It will also help the payers and receivers anonymously.