Digital transformation is very important in the development of public and private organization. To establish a circular economy, digital transformation requires enablers such as deploying blockchain applications. The study presents blockchain technology (BCT) application in supply chain management (SCM) to identify how it impacts on a digital circular economy transition. Blockchain, as a foundational technology for digital SCM, attributes in transparency drives trust in the products and shapes a circular economy (CE) performance. CE transaction in SCM requires various capabilities of blockchain such as immutability, reliability, and traceability. The potential research directions and managerial implications could integrate blockchain-based technology to digitize SCM system. The methodology of this study uses a systematic literature, analysing 39 articles from the year 2012 to February 2022 to present the benefits, risk, or limitations in different sectors, and scrutinizing BCT applications in SCM. Subsequently, the results are presented, showing the advantages of blockchain-based SCM for organizations. Additionally, it is crucial of blockchain-based SCM performance to research from a digital CE perspective. Consequently, the realistic of BCT applications in SCM across various sectors are acknowledged. Finally, it presents the current situation and future recommendation.