In this chapter, we explore into the role of multistakeholder collaboration in propelling sustainable innovation for the digital circular economy. As the world transforms towards sustainable and resource-efficient systems, collaboration is key. The interplay between governments, businesses, academia, and civil society becomes crucial. Understanding what motivates the adoption of technologies like artificial intelligence (AI), blockchain, and the Internet of Things (IoT) is essential. These technologies can drive the implementation of circularity. It deals with how such collaborations can yield innovations, decrease consumption of resources, and help reduce waste by digital solutions to improve circular processes. A whole discussion pertaining to challenges like regulatory, technological, and funding challenges has been used to highlight how those challenges could be precluded. Collective action leading to new business models, sustainable patterns in the production and consumption pattern, and the efficient management of digital resources are discussed here. This chapter will examine how collaborative approaches can unlock the digital CE within broad long-term sustainability and economic resilience, by exploring through policy frameworks innovation ecosystems and stakeholder engagement.