INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Monic N. Devina, D. Meitiara P. Bakrie and Nesya Ashari, ABNR Counsellors at Law
While fintech firms initially enjoyed a more lenient regime intended to spur innovation in the sector, reg - ulatory convergence is occurring, particularly in the areas of AML, capital requirements and governance standards. Law 4/2023 marks a shift toward a more harmonised regulatory framework, where fintech play - ers, especially those handling systemic transactions, face prudential and risk management expectations more akin to traditional financial institutions. 2.5 Regulatory Sandbox Indonesia has a regulatory sandbox that aims to assess the reliability of business processes, business models and financial instruments, and for the govern - ance of unrecognised or unregulated fintech provid - ers. BI maintains a regulatory sandbox for payment system fintech providers, while the OJK has a regula - tory sandbox for providers of non-payment system fintech. BI Regulatory Sandbox The legal basis for the BI regulatory sandbox is set out in BI Reg 23/2021 in conjunction with Law 4/2023. A regulatory sandbox is conducted by the BI to test the development of technological innovation (which includes products, activities, services and business models) against prevailing policies or provisions on payment systems. OJK Regulatory Sandbox Under OJK Reg 3/2024, a fintech provider in the non- payment systems sector – such as an aggregator, a financial planner or an innovative credit assessor – is mandated to apply to the OJK to participate in the OJK’s FSTI regulatory sandbox. Once the OJK issues the approval to participate in the sandbox, the pro - vider will be assessed by the OJK while in a regula - tory sandbox. Within a year, the OJK will issue the result of the assessment that will determine whether the provider passes or fails the regulatory sandbox. If it passes, the OJK will require the provider to apply for a business licence and may request the provider to apply for registration before submitting the business licence application. 2.6 Jurisdiction of Regulators Indonesian regulators may co-ordinate with each oth - er to confirm the boundaries of their respective regu -
latory authority. In 2019, the OJK decided to transfer its regulatory authority over crypto-assets and digital gold trading to Bappebti (a government agency under the Ministry of Trade that regulates futures trading, and, in this case, oversees crypto-assets trading). With the enactment of Law 4/2023, the regulatory authority over crypto-assets was transferred to the OJK on 10 January 2025. In addition, a joint task force of Indonesian regula - tors is also a concrete example of how such regula - tors co-operate with each other. In 2016, the Invest - ment Awareness Task Force (IATF) was established by the following several Indonesian regulators and law enforcement institutions. However, the IATF was modified as the Eradication of Illegal Financial Activi - ties Task Force (the “EIFA Task Force”) in 2023 and through the addition of four governmental institutions into the composition, the task force thus currently consists of: • the OJK; • the Ministry of Trade; • the Investment Co-ordinating Board; • the Ministry of Communication and Digital Affairs (MCD); • the Public Prosecution Service of Indonesia; • the National Police; As discussed in 2.2 Regulatory Regime , while the OJK and BI both have regulatory and supervisory roles in the financial services sectors, their authorities differ. The BI is responsible for formulating and imple - menting monetary policies (including those related to exchange-rate stability and inflation), maintaining the stability of the payments system, and regulating the stability of the financial system by supervising macro- economic conditions and enacting macroprudential policy to prevent financial crises. Conversely, the OJK oversees the banking and non-banking indus - try (including ensuring compliance with regulations through licensing and reporting obligations) and pro - tects consumers within the financial services sectors. • the Ministry of Social Affairs; • the Ministry of Foreign Affairs; • the Ministry of Law; and • the State Intelligence Agency.
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