Indonesia has stated its place as a FinTech powerhouse in the Southeast Asia region. The country’s GDP has been at a steady rate and its FinTech funding has consistently increased over the past three years. It is now a significant part of the global FinTech community.
Indonesia’s FinTech development
One of the key drivers for the industry’s growth and society’s rising interest is the growing use of smartphones and mobile internet. Indonesia’s internet economy is growing, and so are certain FinTech fields. Sectors that are gaining the most traction are:
- Digital wallets,
- P2P lending,
- B2B FinTech.
The fast-growing FinTech ecosystem has also been driven by the proactive government. It works towards encouraging innovation and improving financial inclusion by introducing various rules in P2P lending, digital payments, and open banking.
Indonesia’s CBDC
This year the Bank Indonesia stated that it is currently assessing which technology to use for its CBDC — digital rupiah. The bank has not yet set a timeline, but once it is issued, the digital rupiah will be a legal payment instrument along with banknotes.
The central bank focuses its study on the benefits of a digital currency and the knock-on effect on the payments systems and the monetary system in general.
Who regulates the industry?
There are three main regulators for Businesses in FinTech:
- Bank Indonesia (BI) regulates payment system services.
- The Financial Services Authority (OJK) regulates non-payment services, such as P2P lending, investment management, crowdfunding, etc.
- Bappebit is a supervisory authority for commodities futures trading. Its regulation states that certain cryptoassets can be traded if they have been approved by the Bappebit. Otherwise, it is prohibited by BI regulations.
OJK and Bappebit have sandboxes for FinTech to launch their pilot projects under relaxed regulations. For more in-depth information on regulations on cryptoassets and others, you can visit the ICLG website.
Sources:
Indonesia FinTech Report 2021
FinTech Singapore
ICLG
The BLOCK
Coingeek
