Legal Barriers and Opportunities in The Digital Transformation of Waqf Management in Malaysia: A Critical Analysis

Abstract

Ambiguities surrounding the Shariah compatibility of blockchain and smart contracts, coupled with insufficient data protection measures, pose risks to the integrity of waqf management. However, opportunities exist to modernize waqf practices by expanding the CCA and PDPA, ensuring enhanced cybersecurity and data privacy. This article critically analyzes the legal barriers and opportunities in the digital transformation of waqf management in Malaysia. The primary objective is to identify the regulatory challenges and explore potential reforms necessary for integrating digital technologies like blockchain and online fundraising platforms into waqf administration. The research employs a qualitative approach, examining Malaysia’s existing legal framework, including state-based Islamic law, the Personal Data Protection Act (PDPA), and the Computer Crimes Act (CCA), in conjunction with Shariah compliance. The findings reveal significant legal gaps, particularly in regulating digital tools under current waqf laws. The article underscores the need for a harmonized legal framework that accommodates technological advancements while preserving Islamic principles. Future reforms should focus on creating a standardized digital governance model for waqf institutions across states, facilitating better regulatory compliance and promoting transparency. The study has implications for policymakers, waqf administrators, and legal scholars in enhancing waqf’s socio-economic impact in the digital era.