Implementing a Regulatory Sandbox under Civil Law System: A Breakthrough or Disaster?
This paper critically assesses the legal challenges of implementing a regulatory sandbox for financial technology –also known as FinTech - under Civil Law system. In so doing, it uses the implementation of regulatory sandbox in Indonesia as a case study. As FinTech contributes to the economy of a country by providing fast, efficient accesses to financial services, many countries start to welcome this newly disruptive innovation by introducing a new platform where regulation is partly or fully adjusted to allow such innovation to grow - known as regulatory sandbox.
Most leading countries applying the regulatory sandbox are those under Common Law system with Japan and, recently introduced, Indonesia as an exception. It finds out that, although difficult due to the legal nature of the Civil Law system, implementing a regulatory sandbox within a civil law system country is not impossible. However, some major adjustment is needed to the “regular” concept of regulatory sandbox applied in the Common Law system countries, to fit-in with the legal characters of the Civil Law system. Moreover, one needs to be meticulously delicate in adopting a concept borrowed from a different legal system to avoid confusion. Otherwise, instead of creating a breakthrough, applying regulatory sandbox within a Civil Law system country may turn into a disaster.
Dr Safari Kasiyanto graduated from Tilburg Law and Economic Centre (TILEC), the Netherlands with a PhD in Law and Economic and he is current a Senior Legal Advisor for Bank Indonesia (the central bank of Republic of Indonesia).
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