The world’s most populous Muslim nation has unveiled a rehauled version of its regulatory sandbox as the Republic doubles down on its digital economy drive.
Dubbed Sandbox 2.0, the upgraded sandbox comprises three components: an innovation lab, an industrial sandbox and a regulatory sandbox. The multipronged mechanism is a step up from the previous iteration of the regulatory sandbox.
The latest initiative by Bank Indonesia is very much driven by its ambition to bolster the payment architecture of the country, home to over 270 million people, in line with the 2025 Indonesian Payment System Blueprint which endeavors to strike a balance between optimizing innovation and maintaining financial and economic stability as well as national interest.
BI Governor Perry Warjiyo, during the launch of Sandbox 2.0 at the 2021 Indonesian Digital Financial Economy Festival, affirmed the central bank’s commitment to spearhead innovations in the digitalization of the Republic’s payment infrastructure. This can be seen in the design of Sandbox 2.0.
The first pillar of the sandbox, Innovation Lab, is engineered to allow start-ups and companies test new payment innovation on a limited basis; Industrial Sandbox is designed for existing innovation which needs to be further propagated and promoted; while Regulatory Sandbox is meant for innovation in payment policies or provision. In addition to this, BI is also providing digital workplace facilities for innovators to ease the innovation and development process.
The central bank on the same day also launched its Digital Startup Microsite, a platform to support businesses aspiring to do business digitally in Indonesia.
Digital payments have been a strong focus for Indonesia which, as early as 2019 through the then-National Islamic Finance Committee, identified payments as one of three key focus areas to grow its Islamic digital economy. The other two pillars were a national digital Zakat platform and an Islamic cooperative digital platform. The government in 2020 launched its national Islamic digital payment system, LinkAja Syariah.