Adopting a circular economy (CE) has rapidly emerged among policymakers and business community stakeholders to promote material circularization and ensure sustainable development. While the inclination for a paradigm shift away from the linear economy is evident, many challenges have been quoted in the literature regarding its implementation. Lately, it has become common to propose Information and Communication Technologies (ICT)-based approaches to address these challenges. However, they do not question the practicality of the solutions in the context of CE. This paper aims to find an appropriate digital solution for CE implementation, which is not possible without a complete understanding of the existing challenges. A thorough literature review broadly classified the challenges under five barrier categories: Technological, Financial, Infrastructural, Institutional, and Societal, which was followed up with an investigation into the failure of ICT solutions to address CE challenges. Among the various technologies, blockchain and smart contract technologies show some promise as data-driven decision-making tools; however, they are not without their limitations when applied in the context of CE. This perspective explores the role of blockchain smart contract technology-scape in overcoming CE challenges and presents a circular economy blockchain (CEB) architecture development. The findings suggest that CEB may enable CE business models that improve trust and transparency in supply-chain networks, shared and performance economy platforms, stakeholder participation, and governance and management of organizations. Ultimately, this study highlights critical areas for research and development for the blockchainification of CE.