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On September 25th, 2024, industry experts, including Dr. Suresh Naidu Sadasivan from Masverse, convened at the IFN Asia Forum in Kuala Lumpur. The panel, "The Strategic Development of Islamic Social Finance & the Halal Economy," explored Islamic finance's challenges and future potential.
Islamic social finance is a key aspect of ethical responsibility in Malaysia. Through Zakat, Sadaqah, and Waqf, resources support the underprivileged, promote financial inclusion, and ensure fair wealth distribution. However, as Dr. Suresh noted in the panel, a major challenge is the lack of transparency in fund management. Contributors often do not know if their donations reach the intended beneficiaries.
In his sharing, Dr Suresh highlighted blockchain as a key solution. By utilising blockchain's immutable ledger, we can provide the necessary structure to track the audit trail from start to finish. This transparency allows contributors to see exactly how their Zakat or Sadaqah is utilised.
For instance, with Maschain’s solutions, Zakat contributors can confidently ensure that their donations reach the intended Asnaf (eligible beneficiaries). Additionally, the use of automated smart contracts streamlines transactions based on predefined rules, minimising human error and fraud.
“Blockchain can provide the transparency Islamic finance needs. By ensuring every transaction is recorded immutably, it creates an accountable system that protects the integrity of Zakat, Sadaqah, and Waqf. It’s not just about mobilising resources, but ensuring those resources are distributed equitably and transparently,” said Dr. Suresh.
This is how we can connect traditional Islamic finance with modern technology. By integrating blockchain, we can tackle inefficiencies in fund distribution through real-time tracking of donations. As a result, Zakat donors can see where their contributions are allocated, fostering a more effective and reliable financial ecosystem. This tracking of charitable funds not only boosts accountability but also helps restore public trust, motivating more individuals to participate.
A key topic of discussion at the forum was how Islamic social finance can promote inclusion. Blockchain technology has the potential to strengthen the social finance ecosystem, particularly in rural and underserved areas.
Dr Suresh highlighted that Islamic finance has always focused on ethical responsibility and community welfare. He noted that blockchain supports these principles by facilitating direct fund transfers to communities, ensuring that the intended resources are allocated correctly and not diverted elsewhere.
Other panellists offered great insights during the discussion. For instance, Ms Shabnam Mokhtar focused on empowering minorities through Waqf, Zakat, and Sadaqah, effectively demonstrating how these mechanisms can uplift communities. Furthermore, Dr Hamim Syahrum Ahmad Mokhtar highlighted government-led initiatives that support Halal businesses, thereby emphasizing the importance of institutional backing. Additionally, Ariffin Sabirin stressed the necessity of educating Malaysians about the transfer of Sharia-compliant inter-generational wealth. Finally, Dr Rusni Hassan discussed the crucial role of Islamic finance in promoting sustainable practices, effectively tying the conversation together.
Islamic social finance is crucial for Malaysia's progress, but there's still significant potential for improvement. At Masverse, we are dedicated to empowering businesses and charitable organizations to adopt blockchain, ensuring trust and efficiency in financial systems. The IFN Asia Forum reaffirmed that the future of Islamic finance and the Halal economy is closely linked to innovative technologies that promote transparency, traceability, and sustainability.
Furthermore, Maschain’s blockchain solutions are tailored to assist governments, businesses, and individuals in making Islamic social finance a powerful tool for positive change. By embracing blockchain, we can transform the Halal economy, placing trust and transparency at the core of every transaction.
For more information on how Masverse is leading the way in blockchain applications within Islamic finance, don’t hesitate to contact our team.
Disclaimer: This article is not intended to provide investment advice and should not be considered as such. Any claims made within do not constitute financial guidance. Masverse Sdn Bhd is not liable for any losses incurred by individuals relying on the information in this article. Always conduct your own research before making financial decisions.