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International Journal of Law and Management: Prospects and challenges of Islamic fintech in Indonesia: a legal viewpoint
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Abstract
Purpose – This paper aims to explore the prospects and the challenges of Islamic fintech in Indonesia. This
study also proposes a comprehensive legal framework to encourage and accelerate the growth of the Islamic
economy.
Design/methodology/approach – This study is the result of legal research with a statute approach and
conceptual approach. The types of data used are legal materials consisting of primary legal materials and
secondary legal materials. The technique of collecting legal materials is done by using library research
techniques. The legal materials were analyzed using the legal norm method.
Findings – Indonesia is a country with the largest Muslim population in the world. However, the market
size of Indonesia’s Islamic fintech is still below Saudi Arabia, Iran, United Arab Emirates (UAE) and
Malaysia. Saudi Arabia’s Islamic fintech is the biggest market in the world, with $17.9bn worth of
transactions in 2020 while Iran is at $9.2bn, UAE $3.7bn, Malaysia $3.0bn and Indonesia $2.9bn. This
condition was due to various challenges in the Islamic fintech industry in Indonesia, including inadequate
regulations; complicated permit procedures; misuse of fintech for financing terrorism; rampant occurrence of
illegal fintech businesses; and consumer disputes in the fintech sector. These challenges require the
construction of a comprehensive legal framework through the formation of an Act on Fintech.
Research limitations/implications – The focus of this research was limited to the problems occurring
in the Islamic fintech sector in Indonesia as a country with the largest Muslim population in the world.
Practical implications – The results of this research can be used as recommendations for the
formulation of comprehensive policies for the growth and development of Islamic fintech.
Social implications – Islamic fintech requires a comprehensive legal framework that functions to
encourage the development of the Islamic fintech industry, digital economy growth and legal mitigation of
various legal risks and misuse of fintech for financial crime and financing terrorism.
Originality/value – This paper proposes an original idea of creating a legal framework in a form of the
Islamic Fintech Act. The Act should cover such legal substances as follows: Islamic compliance; an integrated
one-stop permit procedure; division of authority, coordination and synergy among authorities; prevention and
resolution of digital financial system crisis; criminal sanctions; and consumer dispute resolution mechanisms
and alternative institution for fintech consumer dispute resolution.
Yudho Taruno Muryanto - Personal Name
Dona Budi Kharisma and Anjar Sri Ciptorukmi Nugraheni - Personal Name
Dona Budi Kharisma and Anjar Sri Ciptorukmi Nugraheni - Personal Name
NONE
Text
ENGLISH
EMERALD INSIGHT
2022
ENGLAND
JURNAL ILMU HUKUM
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APA Citation
Yudho Taruno Muryanto. (2022).International Journal of Law and Management:
Prospects and challenges of
Islamic fintech in Indonesia:
a legal viewpoint.(Electronic Thesis or Dissertation). Retrieved from https://localhost/etd