Indonesia Fintech Regulatory Updates - Nov 2017

eCurrency enables Indonesia’s first step to digital fiat currency

PayPro Indonesia customers will be able to save and transact using a fully interoperable and secure digital instrument following a new partnership with eCurrency Mint Limited. eCurrency's digital fiat currency (DFC) solution ensures no data manipulation. The solution enables central banks to securely and efficiently issue digital fiat currency to operate alongside notes and coins. The initiative is part of Indonesia's FinTech regulatory sandbox, designed to promote and facilitate financial technology innovation in the country.

New Bank Indonesia rules to monitor fintech

Bank Indonesia (BI) has instituted new regulations that will keep in check new fintechservices that do not fall under existing licensing regimes. It will allow unregistered fintech startups to participate in a "regulatory sandbox," a six-month program to test their services under supervision. The bank will then determine whether those services can be rolled out commercially. Bank Indonesia came to the spotlight recently when it ordered the suspension of the top-up function in electronic wallets for e-commerce services companies Tokopedia and Shopee and ride-hailing app Grab, among others. The bank released a statement that “consumer protection must go on" to prevent the rise of a shadow economy as an outcome of the growing interconnectivity of fintech services.

Fintech center to foster digital economy

Indonesia’s Financial Services Authority (OJK) and the government are setting up a fintech center to foster and oversee all fintech companies in Indonesia. OJK’s board of commissioners’ chairman said that the move will make the industry more transparent and protect consumers. "The providers have to be registered; they cannot issue a product without permits.” Currently there are 24 peer-to-peer (P2P) lending companies with permits. Sixteen of them are local companies and eight are international. Thirty-one more P2P lending companies have also applied to get licenses from the OJK.