The International Sha’riah Research Academy for Islamic Finance (ISRA) is looking for relevant parties to pilot a blockchain project designed to optimize the collection of Islamic charitable donations.
To be known as ZakatTech Blockchain, the project is a collaboration between ISRA and SysCode and will enable funds to be tracked throughout the whole process lifecycle, from the point of donation to distribution of funds. The platform is built on a federated blockchain environment powered by Hyperledger blockchain fabric, with its root nodes deployed on a custom-built cloud platform powered by Microsoft Azure.
“Interestingly, our ZakatTech project is not about introducing another Zakat app in the market. It is about enhancing the Zakat ecosystem. ZakatTech is a platform which allows different Zakat institutions to connect with it,” explained ISRA Executive Director Prof Dr Akram Laldin. “It is not an app by itself; rather, it is a service that enables Zakat institutions to use the blockchain platform to record and trace their transactions.”
What it means is that through the app, each participating Zakat institution will be able to participate, maintain and connect to their own database management systems if they opt to. This will facilitate Zakat institutions to manage the Zakat proceeds and connect Zakat payers and recipients in a more effective and efficient way. ZakatTech does not maintain nor manage the funds received.
Yearly Zakat collections number in the billions of ringgit and therefore deepens the need for a transparent and reliable mechanism to enhance the confidence of the general public in order to drive up Zakat collection to be effectively distributed to the needy, with the ultimate goal of upscaling the social economy.
“We believe that our vision of this platform is able to complement rather than compete with other Islamic fintech or Halal initiatives as collaboration is key to its success. We are developing a platform that we strongly feel could provide an unprecedented layer of trust and transparency to the ecosystem as a whole,” SysCode CEO Reza Ismail said.
IFN Fintech has learned that the platform sandbox environment is fully functioning and SIRA is expecting to launch the pilot project before the end of the year.