Examining Legal Certainty in Online Cash Waqf: The Role of Witnesses in Indonesian Islamic Philanthropy

Waqf is one of the forms of worship encouraged in Islam because it provides continuous (jariyah) benefits, even after the donor (wakif) has passed away. Initially, waqf was carried out in the form of immovable assets, such as land and buildings. Over time, and with the advancement of technology, the concept of waqf has undergone a transformation, including the emergence of cash waqf, which is more flexible and can be managed productively1. In practice, cash waqf is developed by Islamic philanthropic institutions such as the Amil Zakat, Infaq, and Sadaqah Institutions (LAZIS), including LAZIS Sabilillah Malang. Juridically, Law Number 41 of 2004 concerning Waqf regulates the essential elements in the implementation of waqf, including the waqf pledge (ikrar) made before a Waqf Pledge Deed Official (PPAIW) and witnessed by two individuals (Article 17). The presence of witnesses is a crucial aspect in ensuring the validity of the contract and in preventing potential disputes in the future.

Several previous studies have examined the digital transformation in waqf management, such as the study by Wan Ismaill2 which investigated the effectiveness of online cash waqf in increasing public participation, highlighting the role of digital technology in expanding the reach of waqf in the era of Industry 4.0. However, most of these studies focus on management and the economic potential of digital waqf, without delving into the legal aspects of witness presence in the implementation of online waqf pledges3. fundamental difference between conventional waqf contracts and online-based waqf lies in the absence of physical witness presence in digital transactions, which raises questions regarding the validity of the contract under Islamic law and Indonesia’s positive legal system4 Therefore, there exists a significant research gap in the normative aspect concerning the legality of witnesses in online cash waqf. This article offers a new contribution by normatively examining how the role of witnesses in online cash waqf can be fulfilled and legally recognized, particularly within the context of practices carried out by A digital waqf management institution in Indonesia.

The urgency of this research lies in the need to bridge the gap between the normative provisions of national waqf law and the rapidly evolving practice of digitalized waqf. In the current context, society is increasingly inclined to perform waqf transactions online due to their convenience and efficiency. However, the absence of specific regulations governing the legal status of witnesses in digital waqf gives rise to legal uncertainty, potentially disadvantaging the waqif, the nazhir , and the beneficiaries. On the other hand, the need for a digital documentation and validation system as a substitute for the physical presence of witnesses has not yet been comprehensively addressed in existing legislation. This situation underscores the importance of a legal study on online cash waqf practices, with a particular focus on the role of witness presence.

The legal issues addressed in this study revolve around the validity of online-based cash waqf pledges conducted without the physical presence of witnesses, as viewed from the perspective of Indonesian positive law and Islamic law. In addition, this research examines the legal responsibilities of digital waqf institutions in ensuring the validity of waqf contracts executed online, as well as how digital footprints can be considered as a form of legal evidence in the implementation of waqf pledges.

This study aims to examine the validity of online cash waqf pledges that are not accompanied by physical witnesses, and to provide a normative basis for the recognition of digital footprints as a substitute for the witness function in digital cash waqf. Furthermore, the research seeks to offer legal recommendations regarding the need for regulatory reform in digital cash waqf to ensure alignment with technological advancements and the principles of Islamic law.

Methods and Methodology

This research employs a normative juridical approach (doctrinal legal research), which is based on the analysis of applicable positive legal norms, legal doctrines, and legal principles relevant to the Indonesian legal system5. This approach is selected because the core issue examined concerns the legal validity of onlinebased cash waqf implementation without the physical presence of witnesses, which is directly related to the interpretation and application of legal norms stipulated in legislation.

The primary legal sources in this study consist of statutory regulations related to waqf, including Law Number 41 of 2004 on Waqf, Government Regulation Number 42 of 2006 concerning the Implementation of the Waqf Law, and Law Number 11 of 2008 on Electronic Information and Transactions (ITE) along with its amendments6. Secondary legal sources include scholarly literature such as textbooks, journal articles, previous research findings, fatwas issued by the National Sharia Council of the Indonesian Ulema Council (DSN-MUI), as well as technical guidelines from the Indonesian Waqf Board (BWI) concerning cash waqf and the use of digital platforms in its management. In addition, tertiary legal sources such as legal dictionaries, encyclopedias, and other reference guides are utilized to support the interpretation of legal terms and concepts.

**To strengthen the practical relevance of this normative study, the research is also complemented by a limited empirical examination through a descriptive-analytical approach. This is conducted by reviewing the practice of online-based cash waqf implementation at the Sabilillah Malang Charitable Institution for Zakat, Infaq, and Sadaqah (LAZIS)⁷. The empirical component includes document analysis and limited interviews with the management of LAZIS Sabilillah to obtain a factual overview of the online cash waqf pledge mechanism, particularly in terms of recording, documentation, and the role or absence of witnesses in the process. This field data analysis aims to illustrate the gap between the applicable legal norms ( das sollen ) and the actual practice on the ground ( das sein ).

The data is analyzed qualitatively, by interpreting both legal and empirical data based on a systematic approach to statutory regulations, Islamic legal principles, and general principles of civil law and evidence8. The results of this analysis are then used to formulate critical perspectives, identify legal gaps, and develop normative recommendations for the need to update or adjust regulations in order to accommodate the evolving practice of digital cash waqf in Indonesia.

Result and Discussion

Cash waqf is a modern form of waqf practice that possesses distinct characteristics compared to conventional waqf, which typically involves immovable assets. This type of waqf is carried out in the form of cash, which is then managed productively by the nazhir . The returns from such management, whether in the form of investment profits or other income, are subsequently distributed to the beneficiaries of the waqf⁹. In practice, waqf funds are not distributed directly to the beneficiaries; instead, they are utilized as business capital that generates sustainable benefits in accordance with the principles of waqf jariyah .

The concept of cash waqf has strong historical roots in the classical Islamic legal tradition. Imam Zufar of the Hanafi school, in the 8 ^th century CE, was the first scholar to declare that cash waqf is permissible, provided that the funds are invested through a mudarabah contract and the returns are used for social welfare. This view was supported by Imam Bukhari and Ibn Shihab al-Zuhri, who affirmed that the use of dinar and dirham in waqf is allowed as long as the funds generate benefits for the public interest¹⁰. This notion illustrates that, from the outset, the principle of flexibility in the form of waqf assets has been recognized and accepted, as long as it fulfills the requirement of public benefit and is managed with trust and integrity¹¹.

The advancement of information technology, particularly in the financial sector, has given rise to digital innovations in waqf management. The digitalization of waqf allows for the collection of waqf funds through online platforms without the need for face-to-face interaction between the wakif (donor) and the nazhir (manager). This model adopts a financial technology (fintech) approach that integrates financial transactions with the convenience of digital access. In this context, technology serves as an effective bridge to broaden public participation in waqf, especially among the younger generation and urban communities who are familiar with digital financial services¹².

The implementation of online-based cash waqf has been carried out by A digital waqf management institution in Indonesia since January 2024. Based on interviews with the nazhir , it was revealed that the program was formally established through an internal institutional Decree ( Surat Keputusan or SK), which provides institutional legitimacy for its execution. The existence of this decree indicates that the program is not incidental but has been institutionalized and operates within a systematic internal legal framework. Through digitalization, A digital waqf management institution in Indonesia seeks to offer a model of waqf fund collection that is efficient, transparent, and accessible to the wider public¹³.

The strength of this system lies in its ease of access through electronic devices such as smartphones or computers, allowing wakif (donors) to make donations anytime and anywhere. The payment process is also more flexible, offering various methods such as bank transfers, debit/credit cards, and digital wallets. In addition, the transparency and accountability of waqf fund management are enhanced through publicly accessible financial reports, periodic program reporting, and notification systems that provide real-time updates to wakif regarding the utilization of their donated funds. These features strengthen public trust in the fund management conducted by the nazhir ¹⁴.

Nevertheless, the implementation of online-based cash waqf also presents normative challenges, particularly regarding the validity of the waqf pledge ( ikrar ), which legally requires the presence of two witnesses. In the context of traditional waqf, witnesses serve to ensure that the waqf declaration is made voluntarily, lawfully, and free from coercion, and they also act as legal proof in the event of a dispute. The absence of witnesses in the digital pledge process raises legal concerns under positive law, as stipulated in Article 17 of Law Number 41 of 2004 on Waqf, which mandates the presence of two witnesses during the waqf declaration.

In practice, A digital waqf management institution in Indonesia substitutes the physical presence of witnesses with a digital system that automatically records all waqf-related activities. Transfer receipts, transaction notifications, and digital forms are part of the documentation that, functionally, is considered capable of replacing the role of witnesses. Although under Indonesia’s positive law electronic information can serve as valid legal evidence as stipulated in Law Number 11 of 2008 on Electronic Information and Transactions (ITE) a normative justification is still required to determine whether digital footprints carry the same legal weight as the direct testimony of two witnesses.

A study by Alimusa states that trust in digital cash waqf transactions is highly influenced by the system’s verification mechanisms and the credibility of the managing institution. In this regard, nazhir certification and internal audit systems play a critical role in addressing the vulnerabilities left by the absence of physical witnesses. Therefore, the presence of audit systems, electronic validation processes, and the strengthening of institutional capacity are essential efforts to maintain the integrity of transactions¹⁵.

The implementation of online-based cash waqf at A digital waqf management institution in Indonesia reflects an adaptation to contemporary developments while upholding the fundamental principles of Sharia. Although it has not yet fully addressed the normative challenges concerning witness presence, the system represents the direction of modern waqf practices that are inclusive, transparent, and efficient. Nevertheless, there is a need for the reformulation or reinterpretation of positive law to accommodate the dynamics of digitalization in religious transactions, including waqf, while ensuring legal certainty and preserving the underlying Sharia values.

The Role of Witness Presence in Waqf Pledges

In Indonesia’s waqf legal system, the presence of witnesses holds a vital role in ensuring the validity of the waqf pledge ( ikrar wakaf ). Law Number 41 of 2004 on Waqf, particularly Article 17, stipulates that a waqf pledge must be made before a Waqf Pledge Deed Official ( Pejabat Pembuat Akta Ikrar Wakaf , PPAIW) and witnessed by two individuals¹⁶. This provision is not merely an administrative requirement; rather, it reflects the necessity for legal legitimacy and transparency in a legal act that involves the permanent transfer of ownership for religious and public benefit purposes.

The waqf pledge ( ikrar wakaf ), as a form of contract ( akad ), essentially involves two main elements: the declaration by the wakif ( ijab ) and the acceptance by the nazhir ( qabul ). This process may be carried out either orally or in writing. However, for the contract to attain strong legal recognition, the presence of two witnesses is required to directly observe the legal act. These witnesses later serve as key parties who can provide testimony in the event of a dispute or a challenge to the validity of the waqf by interested parties, including the heirs.

In practice, the presence of witnesses functions not merely as a procedural formality but also as a means of verifying the wakif’s intention and seriousness in relinquishing ownership of a particular aset¹⁷. This becomes especially important given the prevalence of disputes arising from disagreements between wakif and heirs— particularly when the pledge process lacks strong evidence that the wakif transferred ownership with full awareness and without coercion.

When witnesses are present during the waqf process, they can ensure that the wakif’s declaration is made lawfully and voluntarily. Their presence also guarantees that all matters pledged comply with the essential elements ( rukun ) and requirements ( syarat ) of waqf according to Islamic law and national regulations¹⁸. Thus, witnesses become part of the legal protection mechanism designed to prevent potential conflicts in the future.

On the other hand, the presence of witnesses also enhances transparency and accountability in waqf management. Since waqf involves assets allocated for the public good, it is essential to ensure that the transfer process begins with clear intentions and follows procedures that can be held accountable. In this context, witnesses serve as neutral parties who record the moment when the ownership status of an asset changes from private property to communal endowment.

Islamic law places significant emphasis on the role of witnesses in various transactions. In fiqh muamalah (Islamic commercial jurisprudence), testimony is regarded as a crucial element to ensure the validity of a contract and to avoid ambiguity ( gharar ). Although there are differing views among the Islamic legal schools ( mazhab ) regarding the extent to which the presence of witnesses is obligatory in a waqf contract, scholars from the Shafi’i and Hanbali schools generally consider witness presence as a complementary requirement that reinforces the legality of the transaction—particularly when it involves valuable assets with broad social impact.

Given the importance of the witness’s role, conducting a waqf pledge without their presence may create a legal gap that poses a risk of future disputes particularly in the context of digitalization, such as online-based cash waqf 19. Although technology can provide digital footprints that serve as formal evidence, the function of witnesses as conscious observers of a legal event has not been fully replaced.

Therefore, the discussion on the presence of witnesses in waqf pledges is not only relevant in traditional contexts but also increasingly important to revisit in the modern era—particularly as transactions have shifted into the digital realm. Harmonizing Islamic legal values, positive law provisions, and technological advancements presents a distinct challenge in preserving both the substance and the legitimacy of the waqf as a legal act.

Challenges in Fulfilling the Requirement of Two Witnessesin the Implementation of Online-Based Cash Waqf at the Amil Zakat, Infaq, and Sadaqah Institution (LAZIS) Sabilillah Malang

One of the key elements in the legal framework of waqf in Indonesia is the Indonesian Waqf Board ( Badan Wakaf Indonesia or BWI). As an independent institution responsible for supervising and developing national waqf, BWI holds the authority to provide guidance to nazhir and to ensure that waqf assets—including onlinebased cash waqf—are managed in accordance with Sharia principles and applicable legal provisions. In this context, BWI acts as a regulatory authority that oversees compliance by waqf institutions and addresses any violations in waqf management.

In practice, the Waqf Pledge Deed Official ( Pejabat Pembuat Akta Ikrar Wakaf or PPAIW) plays a critical role in the waqf legal structure. The PPAIW, typically held by the Head of the Office of Religious Affairs ( KUA ) or an appointed notary, is responsible for recording and legalizing the waqf pledge made by the wakif to the nazhir . In the context of online-based cash waqf, the PPAIW ensures that the waqf transaction is conducted lawfully and properly documented in the form of a Waqf Pledge Deed ( Akta Ikrar Wakaf ). The involvement of the PPAIW strengthens legal certainty in the waqf process, thereby reducing the potential for future disputes.

Institutions that manage online waqf platforms, such as A digital waqf management institution in Indonesia, also constitute an integral part of the legal structure supporting the implementation of digital cash waqf. These institutions are responsible for providing systems that enable the execution of waqf contracts online in accordance with applicable legal provisions. In addition, they play a role in educating and raising public awareness about online cash waqf to increase community participation and understanding of digital waqf systems.

Although the legal structure of waqf has been well established, there are still several challenges that need to be addressed. One of these is the need to enhance the capacity and competence of nazhir in managing digital cash waqf. Interviews with representatives of A digital waqf management institution in Indonesia revealed that nazhir responsible for managing online-based cash waqf must possess certification from an assessment program as a guarantee of their competence. This certification aims to ensure that nazhir have a thorough understanding of waqf management, Sharia-compliant investment, and the regulations governing digital cash waqf. With the implementation of competency standards for nazhir, transparency and accountability in waqf fund management can be more effectively ensured.

The legal structure of online-based cash waqf involves various institutions, each with specific roles in the implementation and supervision of waqf. The success of waqf law depends heavily on the effectiveness of these institutions in carrying out their duties. When all elements within the legal structure function properly, the enforcement of waqf law becomes more effective, ensuring that the objectives of waqf in providing benefits to the community are achieved optimally.

Based on the above analysis, it can be concluded that in the implementation of online-based cash waqf, the role and authority of the nazhir have sufficiently met the required capacity. Therefore, within the legal structure governing online cash waqf at A digital waqf management institution in Indonesia, there are no significant obstacles impeding its implementation.

Upon closer examination, Article 17 of the Waqf Law does not explicitly mandate the presence of witnesses for every waqf pledge. This can be inferred from the absence of the word “must” or any other term that implies an absolute obligation in the formulation of the norm. As a result, the requirement for witnesses in waqf practice becomes subjective, depending on the interpretation of the parties involved. On one hand, some view the presence of witnesses as a vital element in ensuring the validity and transparency of waqf; on the other hand, others argue that a waqf pledge remains valid even without witnesses, as long as the wakif’s intent can be proven through other means, such as written documentation or digital transaction records.

Article 17 of the Waqf Law also does not stipulate any sanctions for parties who fail to present witnesses during the waqf pledge. This indicates a normative ambiguity within the regulation. In a legal system, a rule that lacks legal consequences is difficult to enforce effectively, as there is no certainty regarding the implications of non-compliance. In this case, the absence of sanctions in Article 17 may lead to legal ineffectiveness, as there is no mechanism to regulate the legal consequences if a wakif performs a waqf pledge without witnesses.

In the practice of online cash waqf, the presence of witnesses poses a unique challenge. Cash waqf conducted through digital platforms does not always permit the physical presence of witnesses, as is required in conventional waqf contracts. While conventional waqf requires witnesses to be physically present, digital waqf contracts may substitute this requirement with alternative mechanisms that still uphold the principles of contract validity. However, since the Waqf Law does not yet specifically accommodate such mechanisms, differences in interpretation persist in practice. As a result, some waqf institutions rely solely on digital transaction records as valid evidence of waqf execution.

Due to the ambiguity in the formulation of Article 17 of the Waqf Law, the implementation of regulations concerning witness presence in waqf pledges has given rise to several issues in the practice of online-based cash waqf. These include procedural inconsistencies among waqf institutions, potential legal disputes, and a lack of legal certainty for both wakif and nazhir , as the law does not provide clear guidelines regarding the status of witnesses in online waqf pledges.

Thus,Article17oftheWaqfLawrevealsweaknessesintermsoflegalcertainty,asitdoesnotexplicitlymandatethe presenceofwitnessesinawaqfpledgenorspecifysanctionsfornon-compliance.Thisresultsinnormativeambiguity within the regulation, leading to ineffective implementation particularly in the context of online-based cash waqf. In the context of online cash waqf, the prevailing legal culture of society still does not fully support its optimal implementation. This is evident from the dominant perception that waqf must take the form of physical assets such as land, buildings, or vehicles. The limited public understanding of online-based cash waqf indicates that this concept is not yet fully accepted as a legitimate and beneficial form of waqf practice.

From a legal structural perspective, waqf management institutions such as Nazhir, the Indonesian Waqf Board (Badan Wakaf Indonesia or BWI), and the Ministry of Religious Affairs have made efforts to support the regulation and mechanisms of cash waqf. However, from the standpoint of legal substance, although regulations concerning cash waqf are already established under Law Number 41 of 2004 on Waqf and its derivative regulations, these provisions remain relatively unfamiliar to the broader public. The lack of outreach and education has resulted in limited public understanding of cash waqf mechanisms, particularly in digital form.

From the perspective of legal culture which is a key factor in the acceptance of law within society it can be concluded that the limited understanding of online-based cash waqf reflects the generally low level of public awareness and acceptance of the relevant regulations. As a result, although online cash waqf is legally recognized and has a clear regulatory basis, its practical implementation has yet to develop optimally. However, when discussing the fulfillment of the regulatory requirement for the presence of two witnesses in the implementation of online-based cash waqf at the Amil Zakat, Infaq, and Sadaqah Institution (LAZIS) Sabilillah Malang, legal culture is not the main obstacle in meeting that requirement.

Obstacles in Fulfilling the Regulatory Requirement for the Presence of Two Witnesses in the Implementation of Online-Based Cash Waqf at LAZIS Sabilillah Malang

In the national waqf system, the legal structure has been established through the roles of several key institutions. One of these is the Indonesian Waqf Board ( Badan Wakaf Indonesia or BWI), an independent body mandated to guide and supervise the implementation of waqf throughout Indonesia. BWI functions not only as an administrative regulator but also as a strategic authority ensuring that waqf practices align with Sharia principles and applicable legal provisions. On the other hand, the role of the Waqf Pledge Deed Official ( Pejabat Pembuat Akta Ikrar Wakaf or PPAIW) is also vital in ensuring the legal validity of the waqf pledge²⁰. The PPAIW is responsible for documenting the process into an official deed, as a formal acknowledgment and record of the transfer of ownership from the wakif to the nazhir .

In the context of digital cash waqf, this structure has adapted by involving Islamic philanthropic institutions such as A digital waqf management institution in Indonesia. This institution has developed an online-based system that enables the public to perform waqf pledges without physical presence. This system essentially aims to respond to the challenges of modernity by utilizing technology as a means to expand the reach and accessibility of waqf practices21. Institutionally, the digital system is equipped with electronic tools for managing and recording waqf transactions.

Although institutionally well-organized, challenges remain in fulfilling regulatory requirements, particularly concerning the presence of two witnesses during the waqf pledge. Article 17 of Law Number 41 of 2004 indeed states that the pledge must be made before a Waqf Pledge Deed Official (PPAIW) and witnessed by two individuals. However, the formulation of this provision does not explicitly impose an absolute obligation, as it lacks legal compulsion through terms such as “mandatory” ( wajib ) or “must” ( harus ). This ambiguity opens the door to diverse interpretations, resulting in inconsistent implementation across institutions²².

In practice, many digital waqf institutions do not involve physical witnesses in every pledge process. Some of them substitute the role of witnesses with digital recording systems, which are considered sufficiently representative to indicate that a waqf pledge has occurred. This is where the issue arises. In the absence of physical witnesses, the questions surrounding the validity and evidentiary strength of the pledge become increasingly relevant—particularly in the event of potential legal disputes23.

Another critical issue is the absence of provisions regarding sanctions for the failure to present witnesses during the waqf pledge. The lack of sanctions in a legal norm often weakens its binding force. Without clear legal consequences, the implementation of such provisions becomes dependent on the internal policies of individual institutions or on the interpretation and discretion of the actors involved.

Challenges also arise on the technical side. Online waqf transactions are inherently different from conventional ones. In an online system, the direct involvement of witnesses becomes difficult to realize. Their presence must be adapted to the digital mechanisms employed. Some institutions attempt to adopt electronic transaction records as a form of verification; however, the extent to which these substitutes are legally valid remains a matter of debate, as there is currently no explicit regulation in existing legislation that accommodates this digital reality.

This normative ambiguity has led to procedural inconsistencies across institutions. Some continue to uphold the physical presence of witnesses as an ideal requirement, while others consider digital documentation sufficient. Such discrepancies may result in misunderstandings among stakeholders, including wakif, nazhir, and regulatory authorities.

Beyond the issue of legal norms, another equally important challenge lies in the socio-cultural dimension. Within society, perceptions of waqf remain largely conventional. Many still associate waqf exclusively with immovable property, such as land or buildings. This perception has not yet fully evolved toward accepting cash waqf let alone its implementation through digital platforms. This lack of understanding also influences public perception of formal waqf procedures, including the requirement of witness presence.

Nevertheless, upon closer examination, the challenges stemming from the community’s legal culture do not directly hinder the implementation of the witness procedure at A digital waqf management institution in Indonesia. Instead, the more pressing challenge lies in the legal vacuum and the lack of integration of digital technology into the existing legal framework. Therefore, in the context of the development of online-based cash waqf, the most urgent need is not a change in legal culture, but rather the clarification of legal norms and mechanisms that can legitimately and reliably accommodate digital practices.In the implementation of online cash waqf, the role of institutions such as the Indonesian Waqf Board (BWI) and A digital waqf management institution in Indonesia is crucial not only in managing waqf funds but also in addressing the various normative challenges that arise. One such challenge is the provision requiring the presence of two witnesses in a waqf pledge conducted digitally. Addressing this issue requires a multidimensional approach, including legal, social, and institutional perspectives.

From the perspective of legal substance, one strategic step that can be taken is the revision of regulations governing the technical implementation of waqf, particularly in the digital context. Existing regulations still largely refer to conventional mechanisms that require physical interaction between parties. Therefore, the development of a more adaptive legal framework in response to technological advancements is highly relevant. In this process, it is essential to consider alignment with other related laws, such as the Law on Electronic Information and Transactions (ITE Law), Government Regulations on waqf implementation, and regulations on personal data protection.The issuance of revised regulations or new technical guidelines that explicitly govern the legal validity of digital footprints, electronic identity verification systems, or the use of digital signature technology would help provide legal certainty without compromising the fundamental principles of Sharia.

Such efforts cannot be carried out unilaterally. Cross-institutional collaboration is essential. The government, through the Ministry of Religious Affairs and other relevant bodies, must coordinate with the Indonesian Waqf Board (BWI), the Indonesian Ulema Council (MUI), as well as waqf administrators and Islamic financial institutions. Synergy among stakeholders will strengthen the legitimacy and effectiveness of the regulations developed, while also promoting the responsible use of technology in religious transactions such as cash waqf.

Meanwhile, from the perspective of legal culture, the challenges faced are not merely technical, but also involve public understanding and acceptance of the concept of digital cash waqf itself. Generally, the public still interprets waqf in its traditional forms, such as land or buildings. Understanding waqf as a modern philanthropic instrument that can be conducted online remains limited particularly among communities less familiar with electronic transaction systems.

To that end, educational and awareness-raising approaches must be expanded. Waqf institutions, educational establishments, and civil society organizations can play a vital role in disseminating information regarding the procedures, benefits, and security of implementing digital cash waqf. Waqf literacy programs that are systematically designed and delivered in accessible language will be more effective in building collective awareness.

Through this comprehensive approach addressing both regulatory frameworks and the cultivation of a progressive legal culture it is expected that the implementation of online cash waqf can proceed in a more structured, credible, and accountable manner, in accordance with the principles of justice and transparency upheld in both Islamic and national law.

The Public Law Dimension in Regulating Digital Cash Waqf: Between Payment Systems and State Oversight

The digital transformation of waqf practices, particularly in the form of online-based cash waqf, carries implications beyond the realms of Sharia and institutional management. It gives rise to new imperatives concerning public legal governance. Normatively, digital cash waqf constitutes part of the public fund flow, which by legal standards necessitates regulatory oversight by the state especially in the context of national payment systems and the safeguarding of public funds. This practice cannot be detached from the public legal framework, given that cash waqf transactions are facilitated through digital financial mechanisms akin to other financial instruments, such as electronic transfers, digital wallets, or QRIS platforms. In this context, the role of the state becomes crucial as a regulator that ensures order, integrity, and public trust in digital philanthropic instruments.

From the perspective of public law, any economic activity or transaction interfacing with the financial system and involving public interest must adhere to the principles of transparency, accountability, and legality. As argued by Fanani, the management of cash waqf through digital platforms must not only comply with Sharia norms but also be subject to public administrative oversight involving fiscal and financial authorities24. This aligns with approaches found in international public financial law literature. For instance, Giovanoli and Devos emphasize that “public money flows require clear supervisory frameworks to ensure their alignment with the principles of legality and good governance25

In the Indonesian context, digital transactions including cash waqf are inseparable from the regulatory domain of national payment systems governed by Bank Indonesia and data protection regulations under the authority of the National Cyber and Crypto Agency (BSSN). This indicates that online cash waqf is implicitly subsumed within the scope of state regulation, as it forms part of the digital financial ecosystem that intersects with fiscal interests, financial stability, and public trust. The state’s role as a guardian of public financial transactions should not be construed as an infringement on the autonomy of religious institutions, but rather as a legal legitimization mechanism that ensures digital cash waqf funds are structurally protected within the national legal framework and accorded administrative validity and legal safeguards.

Within modern public law systems, state oversight of collectively managed public funds including in the form of cash waqf constitutes a core mandate to uphold legal order and protect the public interest. Such oversight is not confined solely to traditional state institutions like ministries or fiscal authorities but extends to independent bodies vested with statutory mandates. One such institution is the Indonesian Waqf Board (Badan Wakaf Indonesia, BWI), an independent body established under Article 47 of Law No. 41 of 2004 on Waqf. BWI is vested with supervisory and developmental functions over all waqf activities in Indonesia, including emerging innovations such as digital-based cash waqf.

The role of the Indonesian Waqf Board (Badan Wakaf Indonesia, BWI) as a public supervisor reflects the state’s indirect involvement in ensuring institutional accountability and legal compliance of nazhir ( waqf administrators ). Within this framework, internal auditing, digital transaction transparency, and periodic reporting serve as essential instruments to mitigate the risk of misappropriation both administrative and financial. According to Azmi, the effectiveness of waqf management institutions critically depends on the integration of Sharia supervision and public regulatory oversight, particularly in the digital era where data and transaction manipulation risks are heightened²⁶.

Furthermore, the state’s supervisory mechanisms over faith-based philanthropic financial institutions must be assessed through the lens of good public governance principles, encompassing transparency, participation, and legal accountability. In practice, this oversight must be harmonized with information technology regulations, especially concerning personal data protection and the security of digital payment systems. As Rabbani notes, community-based financial institutions utilizing digital technologies are required to comply with dual regulatory standards substantive (material) and procedural (formal) law—to ensure public trust and the stability of the social finance sector²⁷.

In Indonesia, implementing these principles requires institutional capacity building—both within BWI and among waqf management entities so they can adopt a risk-based and technology-driven supervisory approach. This effort aligns with national Islamic finance policy objectives, which position Islamic philanthropy, including cash waqf, as an integral part of an inclusive and justice-oriented financial architecture.

The development of financial technologies (fintech) has transformed how the public engages with financial instruments, including the implementation of cash waqf. While the digitalization of payment systems has facilitated broader and faster waqf donations, it has also introduced novel legal consequences particularly concerning transactional data security and the protection of wakif rights as fund providers. Digital cash waqf should thus not be viewed merely as a philanthropic tool, but as part of the national financial system, subject to principles of prudence, transparency, and consumer protection.

The legal implications of utilizing digital technologies in cash waqf are closely tied to the concept of trustbased transactions , where confidence in the system and the waqf administrators significantly influences public participation. As emphasized by Arner, digital finance requires an integrated regulatory system that protects consumers from data misuse, payment system failures, and the absence of legal guarantees in electronic transactions. This highlights the urgent need for synergy between financial regulation and data protection frameworks in digital waqf practices²⁸.

In Indonesia, digital cash waqf operates within the legal space defined by Law No. 11 of 2008 on Electronic Information and Transactions (ITE Law), as amended, and Law No. 27 of 2022 on Personal Data Protection. These regulations affirm that philanthropic institutions managing waqf transaction data such as LAZIS must comply with the principles of legality, data transparency, and accountability. However, there remains a regulatory gap: no explicit framework currently connects data protection rules with digital philanthropy transactions.

Transparency also plays a pivotal role in ensuring the legal validity of digital waqf transactions. A report by the Islamic Development Bank (IsDB, 2020) indicates that the success of digital waqf instruments significantly depends on the availability of periodic digital financial reports and the accessibility of information to the public.

In this regard, electronic reporting and auditing mechanisms serve not only as administrative tools but also as legal safeguards for wakif rights within a good governance framework.

Conclusion

The implementation of online-based cash waqf at LAZIS Sabilillah Malang reflects a response to the development of digital technology in the Islamic philanthropic sector. Digitalization enables broader public access and participation in waqf in a more efficient manner, while simultaneously raising normative challenges particularly regarding the requirement of two witnesses as stipulated in Article 17 of Law Number 41 of 2004 on Waqf. The existing legal provisions have not fully anticipated the realities of digital waqf transactions. The lack of normative clarity regarding the physical presence of witnesses, and the absence of sanctions for noncompliance, renders the application of the article subject to multiple interpretations. In practice, some waqf institutions, such as LAZIS Sabilillah Malang, rely on digital footprints as valid evidence of a waqf pledge, but the legal validity of this approach remains uncertain. Moreover, the prevailing legal culture where society continues to perceive waqf in its traditional forms presents an additional barrier to the optimization of digital cash waqf. The lack of legal literacy and limited understanding of online waqf mechanisms contribute to low public trust in the digital system.

Public trust is a crucial element in legitimizing and ensuring the success of policies or programs that involve broad societal interests, including digital philanthropic practices such as cash waqf. In the literature on social sciences and public governance, public trust is understood as society’s belief that public institutions and institutional actors will act consistently with the principles of justice, transparency, and accountability29. Trust is not an abstract entity that arises spontaneously; rather, it is the product of historically constructed relationships between citizens and the socio-political institutions that influence their lives.

Emphasizes that the trustworthiness of an institution is largely shaped by public perceptions of the institution’s performance in upholding legal norms and public ethics30. In the Indonesian context, where legal literacy related to Islamic finance and electronic transactions remains relatively low, the emergence of new technologies such as digital waqf platforms can lead to public uncertainty regarding legal safeguards and the validity of Sharia compliance. This often results in skepticism and resistance toward the use of digital systems, even when such platforms are technically secure and efficient.

Furthermore, in the realm of Islamic philanthropy, public trust operates on two levels. First, trust in Sharia compliance, and second, trust in institutional governance and transparency. When either of these dimensions is lacking, public participation in digital cash waqf tends to stagnate. A report by the Islamic Development Bank notes that the adoption rate of digital waqf platforms is highly influenced by regulatory clarity, open access to information, and the integrity of the nazhir and the managing institutions³¹.

In this regard, the low level of legal literacy and the public’s negative perception of digital transactions are not merely technical barriers; they reflect a deeper structural weakness in the foundation of public trust, which must be cultivated through regulatory reform, legal education, and empirical engagement. Strengthening public trust in the context of digital cash waqf requires an interdisciplinary approach that extends beyond technological innovation to include institutional reform, legal outreach, and broader public understanding of their rights and protections within Sharia-compliant digital financial transactions.

To address these challenges, strategic measures are needed, including regulatory reform that legally and fairly accommodates digital practices, and the strengthening of legal culture through extensive and sustained public education. Synergy between the government, the Indonesian Waqf Board (BWI), the Indonesian Ulema Council (MUI), waqf management institutions, and other stakeholders will be essential in establishing a digital cash waqf system that is aligned with both Sharia principles and Indonesia’s positive legal framework, while also meeting the demands ofjustice and sustainability in a modern context.