This study examines how permissioned blockchain strengthens digital Zakat systems in Malaysia and Indonesia by enhancing transaction traceability, auditability, and social impact reporting without replacing existing digital channels. Drawing on institutional reports, regulatory frameworks, and empirical data, the analysis identifies key governance and organizational prerequisites—such as data standardization, capacity building, and user-centric design—that bridge the gap between pilot intentions and sustainable deployment. The analysis reveals that integrating blockchain into reporting and payroll processes significantly enhances operational efficiency and promotes greater user engagement. Practical contributions include technical architecture for immutable audit logs, and a multi-level performance indicator framework. It also proposes a phased implementation roadmap within regulatory sandboxes. The proposed three-stage model—establishing foundational infrastructure, piloting smart contracts under oversight, and scaling inter-institutional integration—provides actionable guidance for policymakers and Zakat authorities. Results demonstrate that, under supportive regulatory conditions and institutional contexts, constrained smart contracts and interoperable data standards enable verifiable transparency and measurable social impact in Islamic social finance.