NAVIGATING FINTECH SHARIA REGULATION IN INDONESIA: LESSONS LEARNED FROM MALAYSIA

Ermanto Fahamsyah; Kania Venisa Rachim; Ramadhan Dwi Saputra; Vicko Taniady

doi:10.33102/mjsl.vol13no1.794

Authors

Ermanto Fahamsyah Faculty of Law, University of Jember, Jember 68121, East Java, Indonesia https://orcid.org/0009-0003-9403-127X
Kania Venisa Rachim Faculty of Law, University of Jember, Jember 68121, East Java, Indonesia https://orcid.org/0000-0002-9581-5362
Ramadhan Dwi Saputra Faculty of Law, University of Jember, Jember 68121, East Java, Indonesia
Vicko Taniady Faculty of Law, University of Jember, Jember 68121, East Java, Indonesia https://orcid.org/0000-0002-4817-9869

DOI:

https://doi.org/10.33102/mjsl.vol13no1.794

Keywords:

Sharia Fintech, regulation, Indonesia, Malaysia

Abstract

The purpose of this study is to analyze the regulation of Sharia financial technology (fintech) in Indonesia and conduct a comparative analysis of Sharia fintech regulations in Malaysia. The importance of studying Sharia fintech lies in Indonesia’s status as a Muslim-majority country. Establishing a legal framework to govern Sharia fintech is essential for ensuring compliance with Islamic law while encouraging innovation and economic growth. The research employs normative juridical with statutory approaches and comparative studies. Secondary data, including primary and secondary legal materials, forms the basis of the analysis. This research is significant as it addresses the protection of Sharia fintech users in Indonesia, with a focus on key aspects such as business activities, management, and dispute resolution. These research questions are crucial, as they delve into fundamental areas that define the operational integrity and user trust in Sharia-compliant financial technologies. Currently, the regulation of Islamic fintech in Indonesia lacks dedicated legal instruments. Sharia fintech regulations are often intertwined with those governing conventional fintech, resulting in ambiguity for both non-bank financial services institutions and consumers. Notably, one of the instruments of Sharia law, namely the Fatwa issued by the Indonesian Ulema Council (Majelis Ulema Indonesia, MUI) serves as a basis for the application of Sharia principles in fintech, it lacks binding legal force under the hierarchy of Indonesian laws and regulations. Consequently, it cannot effectively govern Sharia principles regulations within the fintech sector. In contrast, Malaysia’s Sharia fintech regulations provide a well-structured framework covering both companies and users. These regulations encompass supervision, implementation, and protection of Sharia principles in fintech. Therefore, drawing insights from Malaysia’s regulatory framework, there is a pressing need to reform Sharia fintech regulations in Indonesia. Such reforms would establish comprehensive legal instruments to ensure clarity and enforceability for both fintech service providers and users.

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