| UU Pengembangan dan Penguatan Sektor Keuangan | |
|---|---|
 | |
| House of Representatives | |
| |
| Citation | Law No. 4/2023 |
| Territorial extent | Indonesia |
| Passed by | House of Representatives |
| Passed | 15 December 2022 |
| Commenced | 12 January 2023 |
| Legislative history | |
| Bill title | RUU Pengembangan dan Penguatan Sektor Keuangan (Bill on Financial Sector Development and Strengthening) |
| Introduced by | Government of Indonesia |
| Status: In force | |
TheFinancial Sector Development and Strengthening Act is anact of parliament in the form ofomnibus law to develop and strengthen theIndonesian financial sector. It is proposed by theJoko Widodo administration. The law was passed by theHouse of Representatives on December 15, 2022.[1]
Unlike the previous omnibus laws proposed by the Joko Widodo administration such asOmnibus Law on Job Creation,Law on State Capital, and2023 Indonesian Criminal Code, this law is the first omnibus law made under mechanisms prescribed in theLaw Formulation Act.
When the law passed, Indonesia is expected to underwent a national economy transition for the next 5 years.[2]
Article 10 of the law introduced new form ofRupiah, Digital Rupiah, ascentral bank digital currency of Indonesia. Digital Rupiah will exist as the third form of Rupiah along with previously known metallic Rupiah (coins) and paper rupiah (paper money). The law mandatedBank Indonesia to regulate the development, issue, and circulation of the Digital Rupiah.[3]
TheFinancial Services Authority (OJK) will have their power increased by the law. OJK will not only monitor financial services, but it will also possess power to monitor saving and loan cooperatives andcryptocurrencies.[4]
By this law, the Ministry of Trade'sCommodity Futures Trading Regulatory Agency will no longer regulate cryptocurrency in Indonesia. The power to regulate the cryptocurrency will be vested to the OJK.[5]
Prior the law passed, the Indonesia Deposit Insurance Corporation (LPS) did not regulate and assure the insurance. Article 53 of the law mandated the LPS to expand their assurance coverage from covering onlybank savings to include the insurance covering in case the insurance company going bankrupt and have problems. LPS will assure the insurance until the new Indonesia Insurance Assurance Corporation (LPP) formed by the mandate of the law, 5 years after the law promulgated.[6]
As OJK and LPS authorities increased, OJK and LPS both will have Board of Commissioners for their institutional oversight on its own, similar to Bank Indonesia structure.[7]
By the law, Bank Indonesia, OJK, and LPS established as completely independent body and free from political influence. Article 56 of the law asserted that no politicians ever allowed to hold the Governor and Board of Commissioners of Bank Indonesia, OJK, and LPS.[8]