23 Jun 2025
Bank Indonesia Strengthens Payment System Governance under Regulation No. 4 of 2025

Bank Indonesia (BI) has issued Regulation No. 4 of 2025 on Payment System Policy (“Regulation 4/2025”) to reinforce the stability, security, and efficiency of Indonesia’s payment ecosystem. The regulation revokes and replaces BI Regulation No. 18/9/PBI/2016 on Payment System and Rupiah Management Supervision and forms part of BI’s broader Policy Mix (Bauran Kebijakan Bank Indonesia or BKBI) response to digital financial innovation and global economic shifts.

Key Principles

Regulation 4/2025 outlines that BI’s payment system policy must reflect the following principles:

• Forward-looking orientation
• Clear goal-setting
• Alignment with international best practices
• Synergistic stakeholder coordination (while preserving BI’s independence)
• Good governance, with emphasis on transparency and accountability

Objectives and Policy Instruments

The regulation reaffirms BI’s mandate to maintain a stable, secure, efficient, and inclusive national payment system. The main objectives and corresponding instruments are:

BI’s regulatory scope now includes payment instruments, institutional frameworks, system mechanics, physical and digital currency, and foreign exchange flows.

Digital Rupiah and the Garuda Project

While Regulation 4/2025 does not elaborate on the digital Rupiah, BI’s 2030 Indonesian Payment System Blueprint (issued August 1, 2024) confirms its development under the Garuda Project as Indonesia’s Central Bank Digital Currency (CBDC). The digital Rupiah is designed to feature programmability, composability, and tokenization—enhancing efficiency while reducing the costs of issuing and managing physical currency.

Scope and Targets

Policy instruments under Regulation 4/2025 apply to:

• Payment system service providers: Including infrastructure providers
• Non-provider parties: Such as foreign exchange businesses and Rupiah depository agents
• Other related parties: Including partners, affiliated entities, and those licensed under relevant laws (e.g., fund transfer operators)

Compliance and Sanctions

All regulated parties—banks, non-banks, infrastructure providers, and affiliates—must comply with BI provisions. Sanctions for non-compliance include:

• Written warnings
• Fines
• Business restrictions or suspensions
• License revocations
• Other administrative measures as determined by BI

BI may also appoint third-party auditors (e.g., public accountants) to perform inspections. These parties are bound by confidentiality and authorized to report findings directly to BI.

Policy Coordination and Transparency

Regulation 4/2025 promotes synergy between BI and external stakeholders, particularly in pricing, consumer protection, risk management, and infrastructure governance. BI is also committed to transparent public communication to manage expectations and foster confidence in the national payment system.

Conclusion

Regulation 4/2025 represents a comprehensive update to Indonesia’s payment system framework, ensuring its alignment with evolving digital and economic realities. It confirms BI’s leadership in shaping a resilient, inclusive, and forward-looking payment ecosystem.

The regulation entered into force on March 27, 2025.

By partner Ayik C. Gunadi (agunadi@abnrlaw.com) and  associate Ruth Mendrofa (rmendrofa@abnrlaw.com).

This ABNR News and its contents are intended solely to provide a general overview, for informational purposes, of selected recent developments in Indonesian law. They do not constitute legal advice and should not be relied upon as such. Accordingly, ABNR accepts no liability of any kind in respect of any statement, opinion, view, error, or omission that may be contained in this legal update. In all circumstances, you are strongly advised to consult a licensed Indonesian legal practitioner before taking any action that could adversely affect your rights and obligations under Indonesian law.