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Designing a Blockchain-Based Model for Zakat Management in Malaysia

Author

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  • Khairil Faizal Khairi

    (Faculty of Economics and Muamalat (FEM), Universiti Sains Islam Malaysia (USIM) 71800 Nilai, Negeri Sembilan, Malaysia)

  • Nur Hidayah Laili

    (Faculty of Economics and Muamalat (FEM), Universiti Sains Islam Malaysia (USIM) 71800 Nilai, Negeri Sembilan, Malaysia)

  • Azuan Ahmad

    (Faculty of Economics and Muamalat (FEM), Universiti Sains Islam Malaysia (USIM) 71800 Nilai, Negeri Sembilan, Malaysia)

  • Murad Ali Ahmad Al-Zaqeba

    (Faculty of Economics and Muamalat (FEM), Universiti Sains Islam Malaysia (USIM) 71800 Nilai, Negeri Sembilan, Malaysia)

Abstract

Wealth redistributive tax, basically based on the zakat, one of the five pillars of Islam, and a very significant form of social benefit. However, zakat management in Malaysia is still facing wasteful problems that are non-transparent, poor governance, and a lack of technological applications. Therefore, this paper is set to identify the main determining success factors of the blockchain-based zakat management model in Malaysia, which will be focused on several key factors: a sound legal and regulatory environment, efficiency and sustainability, stakeholder involvement supporting the initiative, a techno-savvy culture towards technology adoption, and readiness for implementing blockchain. The study employed cross-sectional quantitative research, with Partial Least Squares Structural Equation Modeling (PLS-SEM) as the framework to analyze and examine the direct, indirect, and mediating effects of the constructs on both zakat practices and blockchain adoption. The results suggest several functional policy implications for regulators, zakat institutions, and Islamic finance actors in the realm of zakat administration modernization, focusing on regulatory certainty, technological preparedness, cooperative advocacy, and shared vision as well as institutional reform. Therefore, this paper furthers the Islamic social finance literature by exploring empirically how the blockchain technology can enhance transparency, efficiency, and trustworthiness within zakat governance. This paper proposes future research that includes cross-border blockchain-based zakat systems, comparative with other Muslim countries, and the effectiveness of long-term sustainability using blockchain for zakat management frameworks.

Suggested Citation

  • Khairil Faizal Khairi & Nur Hidayah Laili & Azuan Ahmad & Murad Ali Ahmad Al-Zaqeba, 2025. "Designing a Blockchain-Based Model for Zakat Management in Malaysia," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(23), pages 58-83, October.
    • Handle: RePEc:bcp:journl:v:9:y:2025:i:23:p:58-83
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    References listed on IDEAS

    as
    1. Syaparuddin Razak & Moh. Nasuka & Syahabuddin & Kamaruddin Arsyad & Muh. Darwis, 2024. "Strengthening Zakah Compliance Among Indonesian Muslims Through The Role Of Institutional Capabilities," Journal of Islamic Monetary Economics and Finance, Bank Indonesia, vol. 10(3), pages 497-520, September.
    2. Muhammad Ikhlas Rosele & Abdul Muneem & Abdul Karim Ali & Azizi Che Seman & Luqman Haji Abdullah & Noor Naemah Abdul Rahman & Mohd Edil Abd Sukor, 2025. "A proposed zakat model for digital assets from the Shariah perspective," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 18(3), pages 489-511, January.
    3. Endar Muda & Syafrinaldi S.H & Abd. Thalib, 2024. "Innovative Approaches to Managing Zakat within the Context of Sustainable Development and Societal Well-Being in Indonesia," European Journal of Studies in Management and Business, EUROKD, vol. 29, pages 74-89.
    4. Ahmad Moh’D Ababneh & Baker Akram Falah Jarah & Abdulrahman Al-Kharabsheh & Murad Ali Ahmad Al-Zaqeba & Iman Basheti, 2024. "The role of human resources management in the development of total quality management in the public and private sectors in Jordan," Humanities and Social Sciences Letters, Conscientia Beam, vol. 12(2), pages 319-330.
    5. Saeed Awadh Bin-Nashwan, 2025. "Beyond complexity: do alms tax (zakat) law intricacies justify non-compliance behaviour?," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 33(3), pages 307-325, January.
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