Journal of Central Banking Law and Institutions

INDONESIA’S ELECTRONIC MONEY LANDSCAPE: BETWEEN EFFECTIVITY AND INCLUSIVITY

2024-12-08T03:34:14+00:00

Technology has transformed payment systems. Regulated digital money transactions are replacing traditional cash transactions. However, policy frameworks on payment systems often neglect to consider the diverse needs of society despite the critical role that payment systems play in society. This can be seen by the increasingly mandatory use of electronic money, which may exclude groups who have relied on traditional cash transactions but have unequal technological access. This paper explores the importance of electronic money accessibility from the perspective of Indonesian court decisions. This study reveals that current implementations, policies, and court decisions regarding electronic money have mainly focused on effectiveness rather than inclusivity. Electronic money was created to help unbaked people access financial services. However, ensuring people have technological access to these services must include everyone. This study recommends that policymakers ensure that electronic money services are accessible to the unbanked and those with limited technology access when promoting their use. On top of that, the government must also reinforce that using rupiah, in any form, remains a legal means of payment and must be respected in all transactions.

BLOCKCHAIN TECHNOLOGY INNOVATION AS AN OPTIMIZATION OF TRANSACTION SECURITY IN ISLAMIC FINANCIAL INSTITUTIONS

2024-09-29T13:21:30+00:00

This study examines the role of blockchain technology in enhancing security within Islamic financial institutions, which adhere to Sharia principles emphasising transparency, fairness, and ethical conduct. The primary purpose is to explore blockchain’s potential to address financial risks and inefficiencies while ensuring compliance with Islamic values. Islamic financial institutions face challenges maintaining transaction security and transparency under Sharia constraints, especially as risks like fraud, manipulation, and operational inefficiencies persist. Blockchain’s decentralised ledger system offers solutions by ensuring immutable transaction records, real-time transparency, and secure cryptographic frameworks. Smart contracts further automate Sharia-compliant processes, reducing risks of non-compliance and fraud, while operational efficiencies are achieved through reduced costs and faster transaction processing. However, implementing blockchain in Sharia financial institutions faces limitations, including a lack of technical expertise, regulatory clarity, and inadequate infrastructure in many regions. These barriers highlight the need for capacity-building initiatives and robust regulations to support blockchain adoption in Islamic finance. The study emphasises blockchain’s transformative potential to revolutionise Islamic finance, fostering trust and operational excellence while overcoming current barriers through collaborative efforts. Further research is necessary to optimise blockchain’s integration into this sector.

CBDC ADOPTION: ALIGNING MODEL TECHNOSTRESS INHIBITORS AND PERCEIVED VALUE AMONG INDONESIAN GENERATION Z

2024-09-05T08:19:32+00:00

In recent years, central banks have been left scrambling to respond to the increase in Cryptocurrency transactions by establishing legitimate digital currencies called Central Bank Digital Currency (CBDC). The success of CBDC programmes will be closely tied to the public interest in adopting CBDC. Given the emerging influence of those born into what is commonly known as Generation Z, this research involved 329 Indonesians identifying as Generation Z to determine factors affecting the adoption of Indonesian CBDC. All data were analysed using Structural Equation Modelling Partial Least Square (SEM-PLS). The results show that the main determinants driving Generation Z’s interest in adopting CBDC are perceived value (epistemic, monetary, and convenience value) and general trust. Technostress inhibitors (facilitation of literacy and engagement facilitation) tended to influence Generation Z’s trust. General trust in this study also shows a partial moderating effect in the relationship between perceived value and intention to use CBDC and a full moderation effect on the relationship between technostress inhibitors and intention to use CBDC. The findings of this study provide advice to Bank Indonesia on how to increase the usefulness of CBDC related to monetary value and the value derived from the ease of use of CBDC to maintain public trust and increase public interest.

THE IMPACT OF DIGITAL INNOVATION ON E-COMMERCE YOUNG CUSTOMER SATISFACTION IN VIETNAM

2024-10-30T08:29:49+00:00

This study looks at the influence of digital innovation, notably AI-driven chatbots, on e-commerce consumer satisfaction among young customers in Vietnam. It investigates key factors influencing user satisfaction employing frameworks such as the Uses and Gratifications Theory (U&G), Technology Acceptance Model (TAM), and the Unified Theory of Acceptance and Use of Technology (UTAUT), including utilitarian, hedonic, technological, and social gratifications, privacy risk, and social influence. This research applies a quantitative method, with data collected through an online survey utilising snowball sampling, yielding responses from 1,007 individuals aged 18 to 30. SPSS and PLS-SEM tools are used in the statistical analysis. This study finds that utilitarian, hedonic, technological, and social gratifications positively and substantially impact user satisfaction. Aside from this finding, when engaging with chatbots, consumers are often affected by suggestions and endorsements from peers and their larger social context. This highlights the significance of peer validation and social dynamics in determining user satisfaction. Additionally, Privacy Risks do not substantially impact satisfaction, indicating that customers prioritise practical and emotional advantages over data security concerns when engaging with chatbots. Practical implications include strategically using digital innovation, making reasonable assumptions about privacy risks, and adding social elements to improve consumer satisfaction in Vietnam’s thriving e-commerce industry. This study provides valuable insights for companies navigating digital innovation in Vietnam’s e-commerce ecosystem and digital banking.

ADVANCING FUTURISTIC DIGITAL BANKING: STRATEGIC ENHANCEMENT AND A ROADMAP FOR EXCELLENCE

2024-08-14T02:04:07+00:00

This research aims to rectify misconceptions surrounding banking digitalisation and conduct an in-depth analysis of Bank Indonesia and the Financial Services Authority’s (OJK) policies concerning developing and enhancing the banking sector’s digitalisation. Additionally, this study is designed to formulate a strategic roadmap for developing banking sector digitalisation, accompanied by risk mitigation processes. The fundamental misconception identified herein pertains to the limited understanding of banking digitalisation as merely transitioning from conventional to digital services. This narrow perspective, still embraced by regulatory authorities, adversely impacts national banking industry stakeholders. Employing a normative legal research methodology through an extensive literature review, our findings reveal a prevailing tendency towards structural collaboration in policy formulation rather than embracing synergistic approaches. This research underscores the urgency of formulating visionary and flexible policies in banking digitalisation. Based on the findings, this study seeks to build the framework for policy formulation by regulation authorities in conducting further studies regarding the direction of policies for developing and strengthening banking sector digitalisation.

COMPARATIVE ANALYSIS OF CBDC AND TAX LAW ENFORCEMENT IN SELECTED COUNTRIES

2024-12-19T03:55:57+00:00

This study explores the prospective Central Bank Digital Currency (CBDC) transactions whilst implementing the Automatic Exchange of Information (AEOI) procedures as part of tax law enforcement in Indonesia. The study seeks to address the challenges and opportunities associated with AEOI within a CBDC framework, considering their potential impact on financial transparency, data privacy, and regulatory compliance. Through normative research, comprehensively reviewing relevant literature and policy analysis, the study identifies best practices from other countries, including ASEAN, East Asia, Oceania, The Bahamas, and Sweden, and it aims to develop recommendations for designing an efficient and secure AEOI framework for CBDC transactions in Indonesia. The findings of this study are derived from lessons learnt from selected countries regarding AEOI practices: Australia, Brunei Darussalam, China, Japan, South Korea, Malaysia, New Zealand, and Singapore. Additionally, Sweden and the Bahamas provide aspirational benchmarks for CBDC implementation while simultaneously implementing AEOI. Recommendations are also generated to improve Indonesia’s CBDC and AEOI implementation progress.

REGULATORY AND SUPERVISORY TECHNOLOGY RESEARCH: A BIBLIOMETRIC ANALYSIS

2024-08-13T06:12:37+00:00

This bibliometric study examines articles on Supervisory Technology (SupTech) and Regulatory Technology (RegTech). The investigation’s main focus was on author trends and keywords. The data was carefully examined from the sources indexed on Dimension.ai, where ‘SupTech’ and ‘RegTech’ were the search terms. A bibliometric map was derived using VOSviewer for bibliometric analysis and a descriptive statistical method. VOSviewer software was used to analyse the development trends of publications related to RegTech and Supertech. In recent years, there has been a sharp increase in the number of papers published on RegTech and SupTech. Various journals have tackled the subject, two of the best being “Fintech and RegTech: Impact on Regulators and Banks” by Ioannis Anagnostopoulos and “The Role of Big Data, Machine Learning, and AI in Assessing Risks: A Regulatory Perspective” by Scott W. Bauguess. The most frequently used terms include regulation, supervision, compliance, finance, and technology. Furthermore, over the past ten years, Douglas W. Arner and Simone Di Castri have authored the most articles of any authors. Challenge and Study are two of this theme’s most commonly cited keywords. Digitalisation is critical today and presents a challenge for practitioners and researchers. Academics working in RegTech and SupTech can find relevant information in this study, which gives an overview of keyword trends and the most popular scholars on the subject.