} The Law on Financial Sector Development and Strengthening is an

omnibus Omnibus may refer to: Film and television * ''Omnibus'' (film) * Omnibus (broadcast), a compilation of Radio or TV episodes * ''Omnibus'' (UK TV series), an arts-based documentary programme * ''Omnibus'' (U.S. TV series), an educational progr ...

law formulated by

Joko Widodo Joko Widodo (; born 21 June 1961), popularly known as Jokowi, is an Indonesian politician and businessman who is the 7th and current president of Indonesia. Elected in July 2014, he was the first Indonesian president not to come from an elite ...

administration aimed to develop and strengthen Indonesian financial sector. The law passed by the

People's Representative Council The People's Representative Council of the Republic of Indonesia ( id, Dewan Perwakilan Rakyat Republik Indonesia, DPR-RI), also known as the House of Representatives, is one of two elected chambers of the People's Consultative Assembly (MPR), ...

on 15 December 2022. Unlike the previous omnibus laws passed by Joko Widodo administration such as

Omnibus Law on Job Creation The Job Creation Act ( id, UU Cipta Kerja), officially Law Number 11/2020 on Job Creation (''Undang-Undang Nomor 11 Tahun 2020 Tentang Cipta Kerja'', or UU 11/2020), is a bill that was passed on 5 October 2020 by Indonesia's People's Represent ...

Law on State Capital Law on State Capital ( id, Undang-Undang Ibu Kota Negara/UU IKN) is an omnibus law to relocate capital of Indonesia from Jakarta to Nusantara at East Kalimantan as new capital of Indonesia. The omnibus bill of the law was passed into law on ...

, and

2023 Indonesian Criminal Code The Act No. 1 of 2023 on Criminal Code, or the 2023 Indonesian Criminal Code, is the new Indonesian criminal code replacing the Dutch-era code. The law is the most expensive and longest ever made in Indonesia, being more than 50 years in the ma ...

, this law is the first omnibus law made under mechanism prescribed in 2022 Law on Law Formulation. As the law passed, Indonesia currently undergoes national economy transition for next 5 years after the law passed.

Notable Regulations

Digital Rupiah

Article 10 of the law introduced new form of Rupiah, Digital Rupiah, as

central bank digital currency A central bank digital currency (CBDC) (also called digital fiat currency or digital base money) is a digital currency issued by a central bank, rather than by a commercial bank. A report by the Bank for International Settlements states that, ...

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 mandated Bank Indonesia to regulate the development, issue, and circulation of the Digital Rupiah.

Increasing Sweeping Powers of the Financial Services Authority

The

Financial Services Authority The Financial Services Authority (FSA) was a quasi-judicial body accountable for the financial regulation, regulation of the financial services industry in the United Kingdom between 2001 and 2013. It was founded as the Securities and Investmen ...

(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 and

cryptocurrencies A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank A bank is a financial i ...

Cryptocurrency

By this law, the Ministry of Trade's Commodity Futures Trading Regulatory Agency will no longer regulate cryptocurrency in Indonesia. The power to regulate the cryptocurrency will be vested to the OJK.

Insurance Assurance

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 only bank 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.

Changes to OJK and LPS structure

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.

Status of Bank Indonesia, OJK, and LPS

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.{{Cite web , last=Indraini , first=Anisa , title=Sudah Diketok! Pejabat BI, LPS & OJK Tak Boleh dari Partai Politik , url=https://finance.detik.com/moneter/d-6462713/sudah-diketok-pejabat-bi-lps--ojk-tak-boleh-dari-partai-politik , access-date=2022-12-17 , website=detikfinance , language=id-ID

References

Law of Indonesia Economy of Indonesia Joko Widodo