<p>Blockchain technology has recently emerged as an important digital innovation supporting sustainable industrial development. It is widely recognized for improving transparency, traceability, and accountability in supply chains. However, limited empirical research has examined how blockchain capabilities indirectly influence sustainable performance. This study aims to investigate the impact of blockchain capabilities on sustainable performance, focusing on the mediating roles of circular economy practices and green innovation. The research framework is grounded in the Dynamic Capability View, which explains how firms use digital capabilities to achieve competitive and sustainable advantages. A cross-sectional survey was conducted among 301 respondents from manufacturing, processing, and construction sectors in Bangladesh. The proposed model and hypotheses were tested using Partial Least Squares Structural Equation Modelling (PLS-SEM) with SmartPLS 4.0. The findings reveal that blockchain capabilities significantly enhance sustainable performance. Blockchain capabilities positively influence both circular economy practices and green innovation. In turn, circular economy practices and green innovation significantly improve sustainable performance. Furthermore, both variables partially mediate the relationship between blockchain capabilities and sustainable performance, indicating that blockchain creates sustainability value through organizational processes and innovation activities. This study contributes to the Dynamic Capability View by clarifying the mechanism through which blockchain supports continuous improvement. Practically, the findings guide managers in leveraging digital capabilities to achieve long-term sustainable performance.</p>