Central Bank Digital Currencies or CBDC have attracted increasing attention worldwide. Discussions take place chiefly at the institutional central bank level, and among financial and monetary economists, but now are moving into legal and political spaces. Meanwhile, Bank Indonesia or BI, the Indonesian central bank, has been an active proponent of a digital Rupiah for several years, seemingly focused on payment system improvements, problematic to the extent on-going digitalisation of the economy is not purely a payment system exercise.The Indonesian Parliament or DPR recently authorised in Law No. 4/2023 BI’s creation and management of a digital Rupiah, but open issues remain: (1) the DPR’s emphasis in its guidelines for the digital Rupiah contemplates currently only a domestic rather than crossborder digital Rupiah; (2) the DPR seemingly contemplated broader financial inclusion and more equitable development as a practical matter, while BI’s prior proposals seemed more focused on efficiency and banking sector; and (3) domestic CBDC’s introduction probably constitutes a dress rehearsal for an eventual international CBDC, so a planning function lies hidden. Digital Rupiah’s implementation presumably lies 12 to 24 months ahead, taking place under a new Indonesian President to be elected in 2024, implying new senior financial sector regulators as well. The best legal approach would be for BI to manage the digital Rupiah through external clearing and settlement institutions, and there are numerous international economic law complications in the hidden planning exercise if domestic is to become international digital Rupiah over time. Developing versus developed country CBDC concerns are simply different.
{"title":"CENTRAL BANK DIGITAL CURRENCIES IN THE INDONESIAN SETTING: QUESTIONS & CHOICES","authors":"David K. Linnan","doi":"10.21098/jcli.v2i2.45","DOIUrl":"https://doi.org/10.21098/jcli.v2i2.45","url":null,"abstract":"Central Bank Digital Currencies or CBDC have attracted increasing attention worldwide. Discussions take place chiefly at the institutional central bank level, and among financial and monetary economists, but now are moving into legal and political spaces. Meanwhile, Bank Indonesia or BI, the Indonesian central bank, has been an active proponent of a digital Rupiah for several years, seemingly focused on payment system improvements, problematic to the extent on-going digitalisation of the economy is not purely a payment system exercise.The Indonesian Parliament or DPR recently authorised in Law No. 4/2023 BI’s creation and management of a digital Rupiah, but open issues remain: (1) the DPR’s emphasis in its guidelines for the digital Rupiah contemplates currently only a domestic rather than crossborder digital Rupiah; (2) the DPR seemingly contemplated broader financial inclusion and more equitable development as a practical matter, while BI’s prior proposals seemed more focused on efficiency and banking sector; and (3) domestic CBDC’s introduction probably constitutes a dress rehearsal for an eventual international CBDC, so a planning function lies hidden. Digital Rupiah’s implementation presumably lies 12 to 24 months ahead, taking place under a new Indonesian President to be elected in 2024, implying new senior financial sector regulators as well. The best legal approach would be for BI to manage the digital Rupiah through external clearing and settlement institutions, and there are numerous international economic law complications in the hidden planning exercise if domestic is to become international digital Rupiah over time. Developing versus developed country CBDC concerns are simply different.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-05-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131253634","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In 2021, Bank Indonesia launched the National Open API Payment Standard (SNAP) to facilitate interoperable data-access for Indonesia’s digital payments sector. This article examines the lessons learned from the UK’s experience in open payments to improve the regulatory and institutional framework of Indonesia’s open banking regime. This article employs a comparative legal analysis of the UK’s open banking regime and concludes that Indonesia’s open banking regime could be improved by expanding the delivery of the Open API standards enabling interoperable data access for the entire financial services sector through an outcomes-based approach. Such expansion could be facilitated by encouraging collaboration between banks and fintechs and by creating an Open Banking App Store to increase user adoption, enhance product visibility, and widen access to digital financial services for Micro, Small, and Medium Enterprises (MSMEs)
{"title":"ENHANCING THE COMPETITIVENESS OF INDONESIA’S FINANCIAL SERVICES SECTOR IN THE DIGITAL ERA THROUGH OPEN BANKING: LESSONS LEARNED FROM THE UK’S EXPERIENCE","authors":"Paripurna Sugarda, Muhammad Rifky Wicaksono","doi":"10.21098/jcli.v2i1.63","DOIUrl":"https://doi.org/10.21098/jcli.v2i1.63","url":null,"abstract":"In 2021, Bank Indonesia launched the National Open API Payment Standard (SNAP) to facilitate interoperable data-access for Indonesia’s digital payments sector. This article examines the lessons learned from the UK’s experience in open payments to improve the regulatory and institutional framework of Indonesia’s open banking regime. This article employs a comparative legal analysis of the UK’s open banking regime and concludes that Indonesia’s open banking regime could be improved by expanding the delivery of the Open API standards enabling interoperable data access for the entire financial services sector through an outcomes-based approach. Such expansion could be facilitated by encouraging collaboration between banks and fintechs and by creating an Open Banking App Store to increase user adoption, enhance product visibility, and widen access to digital financial services for Micro, Small, and Medium Enterprises (MSMEs)","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"4 3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131002349","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
China’s increasing engagement in international governance has had significant ramifications in international rule-making and institutional build-up. The post-COVID-19 era has seen a rise of populism in China, as well as an elevation of China’s significance in international governance. This article offers a new perspective on China’s growing influence in the midst of resurgent populism, by focusing on three case scenarios: defending state liability in public health crisis lawsuits, championing financial multilateralism, and an emerging digital currency landscape. The argument made here is that China’s status as a rising power has led it to advocate for international rules, standards, and institutions in a de-Americanised and anti-populist manner.
{"title":"COVID-19 POPULISM CHALLENGES AND CHINA’S FINANCIAL LAW RESPONSES: THREE EMERGING CASE SCENARIOS","authors":"W. Shen, C. Shang, L. Fang","doi":"10.21098/jcli.v2i1.27","DOIUrl":"https://doi.org/10.21098/jcli.v2i1.27","url":null,"abstract":"China’s increasing engagement in international governance has had significant ramifications in international rule-making and institutional build-up. The post-COVID-19 era has seen a rise of populism in China, as well as an elevation of China’s significance in international governance. This article offers a new perspective on China’s growing influence in the midst of resurgent populism, by focusing on three case scenarios: defending state liability in public health crisis lawsuits, championing financial multilateralism, and an emerging digital currency landscape. The argument made here is that China’s status as a rising power has led it to advocate for international rules, standards, and institutions in a de-Americanised and anti-populist manner.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130692509","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The objective of this research is to correct misconceptions about the metaverse and metaverse banking, as well as to refute national legal perspectives on metaverse banking. It is designed to also shed some light on challenges and opportunities connected to the plan of legal architecture on metaverse banking along with its supervision and enforcement mechanisms. Metaverse banking consists of banking activities in the metaverse ecosystem. Due to the rapid development of metaverse banking on a global level and unresponsive national regulations to govern it, there is no adequate legal regulation for this activity in Indonesia. The research method is normative through literature study. This research findings illustrate persistent errors about the concept of metaverse banking including the national legal authority’s perspective on the substance of regulation. The results also show that challenges and opportunities exist for devising a legal architecture on metaverse banking accompanied by a mechanism for supervision and dispute resolution. This research contributes to as well as serves as one of the references for study on metaverse banking in Indonesia
{"title":"DEVISING AN INDONESIAN LEGAL ARCHITECTURE FOR METAVERSE BANKING: CHALLENGES AND OPPORTUNITIES","authors":"K. Pratama","doi":"10.21098/jcli.v2i1.48","DOIUrl":"https://doi.org/10.21098/jcli.v2i1.48","url":null,"abstract":"The objective of this research is to correct misconceptions about the metaverse and metaverse banking, as well as to refute national legal perspectives on metaverse banking. It is designed to also shed some light on challenges and opportunities connected to the plan of legal architecture on metaverse banking along with its supervision and enforcement mechanisms. Metaverse banking consists of banking activities in the metaverse ecosystem. Due to the rapid development of metaverse banking on a global level and unresponsive national regulations to govern it, there is no adequate legal regulation for this activity in Indonesia. The research method is normative through literature study. This research findings illustrate persistent errors about the concept of metaverse banking including the national legal authority’s perspective on the substance of regulation. The results also show that challenges and opportunities exist for devising a legal architecture on metaverse banking accompanied by a mechanism for supervision and dispute resolution. This research contributes to as well as serves as one of the references for study on metaverse banking in Indonesia","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131488470","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ratu Silfa Addiba Nursahla, Nismara Paramayoga, Muhammad Anas Fadli, Muhammad Pravest Hamidi
For experts in the field of central banking, the growth of green finance presents a significant opportunity for of research. This rapid emergence of green finance springs from the urgent need to address the threat of climate damage and the important role of central banks in supporting this transition to sustainability. In this study, we utilise the legal instruments framework proposed by Volz to analyse the legal aspects of green finance within the context of the central bank in Indonesia. Our findings indicate that Bank Indonesia, as well as the Financial Service Authority, has a range of regulatory tools at its disposal to influence borrowing and lending policies, as well as investment choices. Several green finance instruments have been created under Indonesian laws and regulations, including loan to value/finance to value, green finance guidelines and frameworks, and affirmative measures to support green finance. The future of the legal framework on green finance in Indonesia looks promising, with the implementation of sustainable finance from businesses and support from the government. However, there is still room for Bank Indonesia to adopt additional regulatory instruments, such as incentives for redirecting resources to low-carbon investments to further promote sustainable finance.
{"title":"LEGAL ASPECTS OF THE CENTRAL BANK’S GREEN FINANCE INSTRUMENTS IN INDONESIA: AN OVERVIEW","authors":"Ratu Silfa Addiba Nursahla, Nismara Paramayoga, Muhammad Anas Fadli, Muhammad Pravest Hamidi","doi":"10.21098/jcli.v2i1.38","DOIUrl":"https://doi.org/10.21098/jcli.v2i1.38","url":null,"abstract":"For experts in the field of central banking, the growth of green finance presents a significant opportunity for of research. This rapid emergence of green finance springs from the urgent need to address the threat of climate damage and the important role of central banks in supporting this transition to sustainability. In this study, we utilise the legal instruments framework proposed by Volz to analyse the legal aspects of green finance within the context of the central bank in Indonesia. Our findings indicate that Bank Indonesia, as well as the Financial Service Authority, has a range of regulatory tools at its disposal to influence borrowing and lending policies, as well as investment choices. Several green finance instruments have been created under Indonesian laws and regulations, including loan to value/finance to value, green finance guidelines and frameworks, and affirmative measures to support green finance. The future of the legal framework on green finance in Indonesia looks promising, with the implementation of sustainable finance from businesses and support from the government. However, there is still room for Bank Indonesia to adopt additional regulatory instruments, such as incentives for redirecting resources to low-carbon investments to further promote sustainable finance.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121207496","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In recent years, increasing awareness of the impact of climate change has attracted the attention of central banks in a number of countries. Under their authority, some central banks have started to formulate “green policies.” These green policies include a green version of quantitative easing, buying green bonds in order to support the growth of environmentally friendly financial institutions, and imposing restrictions or prohibitions on non-environmentally friendly industry lending by banks. Bank Indonesia itself is starting to explore banking policies that are more environmentally friendly, one of which is by managing financial instruments in a sustainable manner and providing green incentives. This raises unavoidable questions about the legitimacy of Bank Indonesia’s promulgation of these environmentally friendly bankingpolicies and the issues of independence, accountability and legitimacy that accompany them. This research found that green finance policies were adopted by Bank Indonesia due to its flexibility and/or independence in deploying various policy instruments, the expansion of Bank Indonesia’s mandate to maintain financial system stability, institutional relationships, and involvement in various green financial forums. However, further discussion shows that this expansion of its mandate simultaneously affects the independence of the central bank leading to issues surrounding the accountability and even legitimacy of the central bank
{"title":"THE CENTRAL BANK’S POLICY JUSTIFICATION IN MITIGATING CLIMATE CHANGE","authors":"Muchammad Chanif Chamdani, Bramanda Sajiwo Santoso","doi":"10.21098/jcli.v2i1.36","DOIUrl":"https://doi.org/10.21098/jcli.v2i1.36","url":null,"abstract":"In recent years, increasing awareness of the impact of climate change has attracted the attention of central banks in a number of countries. Under their authority, some central banks have started to formulate “green policies.” These green policies include a green version of quantitative easing, buying green bonds in order to support the growth of environmentally friendly financial institutions, and imposing restrictions or prohibitions on non-environmentally friendly industry lending by banks. Bank Indonesia itself is starting to explore banking policies that are more environmentally friendly, one of which is by managing financial instruments in a sustainable manner and providing green incentives. This raises unavoidable questions about the legitimacy of Bank Indonesia’s promulgation of these environmentally friendly bankingpolicies and the issues of independence, accountability and legitimacy that accompany them. This research found that green finance policies were adopted by Bank Indonesia due to its flexibility and/or independence in deploying various policy instruments, the expansion of Bank Indonesia’s mandate to maintain financial system stability, institutional relationships, and involvement in various green financial forums. However, further discussion shows that this expansion of its mandate simultaneously affects the independence of the central bank leading to issues surrounding the accountability and even legitimacy of the central bank","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"77 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126988806","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyses Indonesia’s new regulatory framework of carbon pricing, namely Presidential Regulation No. 98 of 2021 on Carbon Economic Value (Presidential Regulation No. 98/2021). The Presidential Regulation is analysed under Law No. 12 of 2011 on the Formation of Legislation). This paper found that even though this regulation has fulfilled all the principles stated in the Law on the Formation of Legislation, many details are left to be regulated (as indeed requested in the Presidential Regulation), and more clarification needed for the roles of each actor and stakeholders in carbon economic valuation and how carbon economic valuation invites public participation
{"title":"LEGAL ANALYSIS ON PERATURAN PRESIDEN NO. 98 TAHUN 2021: NILAI EKONOMI KARBON (NEK) CARBON PRICING IN INDONESIA","authors":"Linda Yanti, Louie Buana","doi":"10.21098/jcli.v2i1.46","DOIUrl":"https://doi.org/10.21098/jcli.v2i1.46","url":null,"abstract":"This paper analyses Indonesia’s new regulatory framework of carbon pricing, namely Presidential Regulation No. 98 of 2021 on Carbon Economic Value (Presidential Regulation No. 98/2021). The Presidential Regulation is analysed under Law No. 12 of 2011 on the Formation of Legislation). This paper found that even though this regulation has fulfilled all the principles stated in the Law on the Formation of Legislation, many details are left to be regulated (as indeed requested in the Presidential Regulation), and more clarification needed for the roles of each actor and stakeholders in carbon economic valuation and how carbon economic valuation invites public participation","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130975997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Z. Mahardika, Rizky Banyualam Permana, Nadia Maulisa
Central banks worldwide are coming to terms with the bits and bytes of digital money, commonly referred to as Central Bank Digital Currency (CBDC). CBDC has been claimed to be safer, more secure, and inherently less volatile, unlike cryptocurrencies, as it is issued and regulated by central banks. The development of digital currency not only emerged in, and isolated developed countries’ monetary policy but also came from the emerging markets. However, the policy and academic discussion on CBDC is clouded as only a significant minority of states have instituted it. From a regulatory point of view, the basic concept of CBDC is still significantly understudied. Among the emerging scholarship, there remains a paucity of study on the (legal) aspects of cybersecurity risk and resilience of the proposed CBDC. This paper explores the role of Bank Indonesia (BI), as the central bank, in implementing CBDC and conducts a preliminary expose associated with cybersecurity risks. This paper shows that CBDC understood as not only usage of Digital Ledger Technologies, (DLTs), but in all models of electronic payment. There are diverging models for the implementation of CBDC, some models involve multiple actors and electronic systems. However, as a currency the Central Bank would ultimately bear the liability for each transaction. Therefore, it is important for BI, as the central bank, consider cybersecurity risks associated with the implementation of CBDC. Cybersecurity risks in the financial sectors including CBDC, is the potential disruption caused by cyber-attacks, IT failures, personnel, and physical or infrastructure security risks.
{"title":"GOING DIGITAL RUPIAH: SOME CONSIDERATIONS FROM SOVEREIGNTY AND CYBERSECURITY PERSPECTIVES","authors":"Z. Mahardika, Rizky Banyualam Permana, Nadia Maulisa","doi":"10.21098/jcli.v2i1.42","DOIUrl":"https://doi.org/10.21098/jcli.v2i1.42","url":null,"abstract":"Central banks worldwide are coming to terms with the bits and bytes of digital money, commonly referred to as Central Bank Digital Currency (CBDC). CBDC has been claimed to be safer, more secure, and inherently less volatile, unlike cryptocurrencies, as it is issued and regulated by central banks. The development of digital currency not only emerged in, and isolated developed countries’ monetary policy but also came from the emerging markets. However, the policy and academic discussion on CBDC is clouded as only a significant minority of states have instituted it. From a regulatory point of view, the basic concept of CBDC is still significantly understudied. Among the emerging scholarship, there remains a paucity of study on the (legal) aspects of cybersecurity risk and resilience of the proposed CBDC. This paper explores the role of Bank Indonesia (BI), as the central bank, in implementing CBDC and conducts a preliminary expose associated with cybersecurity risks. This paper shows that CBDC understood as not only usage of Digital Ledger Technologies, (DLTs), but in all models of electronic payment. There are diverging models for the implementation of CBDC, some models involve multiple actors and electronic systems. However, as a currency the Central Bank would ultimately bear the liability for each transaction. Therefore, it is important for BI, as the central bank, consider cybersecurity risks associated with the implementation of CBDC. Cybersecurity risks in the financial sectors including CBDC, is the potential disruption caused by cyber-attacks, IT failures, personnel, and physical or infrastructure security risks.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-01-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116307510","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the era of digital economic development, blockchain and crypto asset innovations have gained wide acceptance and skyrocketing worldwide demand. Behind the emergence of popular crypto assets, the mechanism of an Initial Coin Offering (ICO) is used to issue this new form of currency. An ICO is highly favoured because of its efficiency, minimum underwriting requirements, high profits, and liquidity. Without exception, the hype accompanying ICOs has also influenced the Indonesian public. There remains, however, very minimal protection for investors who participate in ICOs that are being held in Indonesia. There are many disadvantages to an ICO, including high risks for investors, its vulnerability to fraud or crime, and the lack of regulation regarding the mechanism of ICOs. Furthermore, ICOs are very much intertwined with the development of decentralised finance (DeFi), one of the latest crypto-related financial innovations. DeFi likewise poses various risks and threats to the traditional financial system that needs to be monitored from the beginning of the ICO process. Therefore, by using normative research methods based on literature studies, this study aims to comprehensively explain the problems of ICO investor protection in Indonesia and the solutions for overcoming these problems.
{"title":"REGULATING INITIAL COIN OFFERING AMIDST THE DEVELOPMENT OF CRYPTO ASSETS IN INDONESIA","authors":"Alexander Harryandi, Fira Natasha, Muhammad Akbar","doi":"10.21098/jcli.v1i3.41","DOIUrl":"https://doi.org/10.21098/jcli.v1i3.41","url":null,"abstract":"In the era of digital economic development, blockchain and crypto asset innovations have gained wide acceptance and skyrocketing worldwide demand. Behind the emergence of popular crypto assets, the mechanism of an Initial Coin Offering (ICO) is used to issue this new form of currency. An ICO is highly favoured because of its efficiency, minimum underwriting requirements, high profits, and liquidity. Without exception, the hype accompanying ICOs has also influenced the Indonesian public. There remains, however, very minimal protection for investors who participate in ICOs that are being held in Indonesia. There are many disadvantages to an ICO, including high risks for investors, its vulnerability to fraud or crime, and the lack of regulation regarding the mechanism of ICOs. Furthermore, ICOs are very much intertwined with the development of decentralised finance (DeFi), one of the latest crypto-related financial innovations. DeFi likewise poses various risks and threats to the traditional financial system that needs to be monitored from the beginning of the ICO process. Therefore, by using normative research methods based on literature studies, this study aims to comprehensively explain the problems of ICO investor protection in Indonesia and the solutions for overcoming these problems.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"383 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116477639","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The development of digitalisation in the financial services sector has compelled Bank Indonesia to develop Central Bank Digital Currency (CBDC). CBDC as a new type of money requires adjustments in terms of applicable laws and regulations. In an attempt to identify the design and legal regulations regarding CBDC, this paper performs a literature review through various related studies carried out internationally and in Indonesia. The novelty of this paper is to apply the rule of law to each selected CBDC design. Based on the study, CBDC design consists of wholesale and retail that can use token or account-based authentication. Then, CBDC transactions can be managed by the central bank or transacted through a Distributed Ledger Technology (DLT) system. In addition, another CBDC characteristic is based on interest-bearing and non-interest-bearing. The different implementation and selection of CBDC resulted in regulations that needed to be improved. Related to the legal aspect of CBDC in Indonesia, revisions are required to the substance of Law No. 7 of 2011 on Currency which must state that the form of rupiah includes CBDC. Furthermore, other rules that need to be considered are privacy and property laws, DLT, and insolvency law, as well as regulation of competition between CBDC and depository banks.
{"title":"DESIGN AND LEGAL ASPECT OF CENTRAL BANK DIGITAL CURRENCY: A LITERATURE REVIEW","authors":"F. Handayani","doi":"10.21098/jcli.v1i3.35","DOIUrl":"https://doi.org/10.21098/jcli.v1i3.35","url":null,"abstract":"The development of digitalisation in the financial services sector has compelled Bank Indonesia to develop Central Bank Digital Currency (CBDC). CBDC as a new type of money requires adjustments in terms of applicable laws and regulations. In an attempt to identify the design and legal regulations regarding CBDC, this paper performs a literature review through various related studies carried out internationally and in Indonesia. The novelty of this paper is to apply the rule of law to each selected CBDC design. Based on the study, CBDC design consists of wholesale and retail that can use token or account-based authentication. Then, CBDC transactions can be managed by the central bank or transacted through a Distributed Ledger Technology (DLT) system. In addition, another CBDC characteristic is based on interest-bearing and non-interest-bearing. The different implementation and selection of CBDC resulted in regulations that needed to be improved. Related to the legal aspect of CBDC in Indonesia, revisions are required to the substance of Law No. 7 of 2011 on Currency which must state that the form of rupiah includes CBDC. Furthermore, other rules that need to be considered are privacy and property laws, DLT, and insolvency law, as well as regulation of competition between CBDC and depository banks.","PeriodicalId":292753,"journal":{"name":"Journal of Central Banking Law and Institutions","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"120945848","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：