A Systematic Literature Review on the Use of Blockchain Technology in Transition to a Circular Economy
Ishmam Abid, S. M. Zuhayer Anzum Fuad, Mohammad Jabed Morshed Chowdhury, Mehruba Sharmin Chowdhury, Md Sadek Ferdous
TL;DR
This study addresses the problem of resource inefficiency in the linear economy by evaluating how blockchain technology can support the circular economy through the $4R$ framework. It uses a systematic literature review of 41 sources (with 35 high-quality papers after QA) to map blockchain-enabled use cases and propose architectures that reduce resource consumption and promote reuse, recycling, and recovery. Key findings show blockchain can enhance transparency, traceability, and efficiency across Reduce, Reuse, Recycle, and Recover, with concrete examples in lifecycle tracking, secondary markets, and token-based incentives, but substantial challenges remain in scalability, interoperability, data protection, and regulation. The work highlights where blockchain adds value to CE and calls for broader stakeholder participation and further research to enable real-world deployment.
Abstract
The circular economy has the potential to increase resource efficiency and minimize waste through the 4R framework of reducing, reusing, recycling, and recovering. Blockchain technology is currently considered a valuable aid in the transition to a circular economy. Its decentralized and tamper-resistant nature enables the construction of transparent and secure supply chain management systems, thereby improving product accountability and traceability. However, the full potential of blockchain technology in circular economy models will not be realized until a number of concerns, including scalability, interoperability, data protection, and regulatory and legal issues, are addressed. More research and stakeholder participation are required to overcome these limitations and achieve the benefits of blockchain technology in promoting a circular economy. This article presents a systematic literature review (SLR) that identified industry use cases for blockchain-driven circular economy models and offered architectures to minimize resource consumption, prices, and inefficiencies while encouraging the reuse, recycling, and recovery of end-of-life products. Three main outcomes emerged from our review of 41 documents, which included scholarly publications, Twitter-linked information, and Google results. The relationship between blockchain and the 4R framework for circular economy; discussion the terminology and various forms of blockchain and circular economy; and identification of the challenges and obstacles that blockchain technology may face in enabling a circular economy. This research shows how blockchain technology can help with the transition to a circular economy. Yet, it emphasizes the importance of additional study and stakeholder participation to overcome potential hurdles and obstacles in implementing blockchain-driven circular economy models.