Governance in the Digital Era: The Role of Blockchain Technology in Enhancing Accountability

Abstract

Technological transformation has contributed to governance by presenting great opportunities to enhance efficiency, transparency, and accountability. This shift allowed governments to manage administrative processes, share information instantly, and allowing auditing management processes. In the current context, emerging technologies like artificial intelligence, blockchain, and big data analytics are reshaping governance. Traditionally Zakat, which is payment made annually under Islamic law on certain kinds of property and used for charitable and religious purposes and it is one of the Five Pillars of Islam, has been collected and distributed by government institutions, charitable organizations or individuals. However, this process can be inefficient and prone to errors. One of the biggest challenges for Zakat institutions as well as charities in the general context is their inability to prove their transparency and reliability and thus gain donor’s trust. Moreover, as the world becomes more digitally connected, there has been a growing interest in the digitalisation of Zakat and use of smart contracts. Smart contracts are essentially programs stored on a blockchain that run when predetermined conditions are met. This approach offers several potential benefits, including increased transparency, efficiency in Zakat distribution, low transaction costs and greater efficiency in terms of the time required to execute such contracts. The digitalization of Zakat and the use of smart contracts is relatively new and emerging, although potential benefits exist some challenges persist. The purpose of this article is to propose a flowchart for the logical steps to transfer Zakat payment from the Zakat payer's account to the beneficiary's account linking all stakeholders involved to facilitate collection and payment of Zakat.