Sukuk Blockchain: An Innovation—Opportunities and Challenges

Abstract

Sukuk blockchain, which is one of the innovations in the advancement of IR 4.0 technology, aims to further improve the quality of sukuk, expand the sukuk market and increase the country’s economic growth. This preliminary survey study aimed to identify opportunities and challenges in the sukuk blockchain. This study adopted the literature review method, which was subjected to a content analysis (qualitative research method). Findings indicate that sukuk blockchain is able to further improve the quality of sukuk structuring by being transparent, trackable (traceable), simplified, economical and prompt. Elements found in the sukuk blockchain can provide opportunities to further improve the existing sukuk structure, overcome existing problems and expand the existing sukuk market. This study found that the sukuk blockchain offers extensive opportunities for improving the national economy because it can ensure the security of sukuk data against hacking, reduce the risk of payment defaults and enhance the transparency and trackability of sukuk issuance operations. However, there are challenges in the implementation of the sukuk blockchain, such as the difficulty in controlling its operations so that they are consistent with Syariah principles due to the lack of specific laws, software errors in technology and systems of sukuk blockchain, lengthy time required for community acceptance, ambiguous regulations and an absence of standards.