Blockchain-Based Digitalization of Zakat and Waqf for Sustainable Infrastructure and Economic Development

Abstract

Indonesia has an estimated zakat potential of around IDR 327 trillion and a cash waqf potential of around IDR 180 trillion per year, yet actual collection remains far below these figures owing to low public trust, limited transparency in distribution, and the high administrative costs of managing institutions. At the same time, social and economic infrastructure development requires alternative sources of financing beyond the state budget. This study aims to design a conceptual model of blockchain-based zakat and waqf digitalization that enhances efficiency, integrity, and Sharia compliance while channelling Islamic philanthropic funds to support SDG 8 (decent work and economic growth) and SDG 9 (industry, innovation, and infrastructure). The study adopts a qualitative approach with a conceptual design adapted from the Design Science Research Methodology, drawing on a synthesis of scholarly literature, regulations, fatwas, and official reports of zakat and waqf institutions. The result is the Blockchain Zakat–Waqf for Sustainable Development (BZW-SD) Model, which comprises five layers: stakeholders, digital collection, a consortium blockchain with four smart contracts, milestone-based disbursement, and governance and public transparency. The model strictly separates zakat flows, directed to the economic empowerment of zakat recipients (SDG 8), from waqf flows, directed to productive assets and social infrastructure (SDG 9), thereby addressing the juristic debate over the use of zakat for infrastructure. Six testable conceptual propositions are also formulated. Practically, the model offers a reference for BAZNAS, the Indonesian Waqf Board, regulators, and Islamic financial institutions in designing a transparent and impactful digital Islamic philanthropy ecosystem.