Indonesia Introduces New Regulation For P2P Lending Startups

Fintech is a trend that captivates audiences all over the world. A financial technology evolution is upon us, and it is only a matter of time until drastic changes occur. Indonesia is preparing for what the future may bring, by issuing a new regulation for fintech firms. To be more precise, the government focuses on P2P lending first and foremost.  

One of the many sectors fintech is “threatening” is the way people think about lending and borrowing money. In most cases, consumers and enterprises have to find common ground with a bank or other financial institution to secure a loan. But various fintech firms are experimenting with peer-to-peer lending, which would allow anyone to loan or borrow from everyone else.

P2P Lending Scrutinized By Indonesian Government

In Indonesia, various fintech startups are active in the P2P lending sector. Until now, they have been unencumbered by existing financial regulation. But that situation will come to change, as the government issued a new regulation. Firms are required to have a minimum of Rp1bn when registering with the Indonesian Financial Services Authority. Additionally, there is a capital requirement of Rp2.5bn when applying for a business license.

This new regulation is a first step towards supervising the fintech sector in Indonesia. Startups are always in need of some guidance along the way, and the government keeps an open mind in this regard. However, they also acknowledge the fintech industry is “fledgling” right now. Additionally, further regulation for other financial business models will be introduced later this year. It remains unclear which sector will be affected by this change, though.

Moreover, the Financial Services Authority launched a regulatory sandbox for fintechs and other startups. The Bank of Indonesia will launch their fintech office later this year, albeit no specific date has been announced. It is evident Indonesia wants to be a part of the fintech revolution, and the new regulation is designed to facilitate this change.

Going after P2P lending is not entirely surprising either. The market cuts out intermediaries, yet can increase financial risk for the involved parties. It is only natural the government wants to prevent financial losses due to these practices. Right now, P2P lending is an unregulated industry in the country, but that will not be the case much longer.

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Bitcoin, at the present time, is known as the easiest and most popular online payment system invented by Satoshi Nakamoto in the year of 2008. In 2009, it was initially released as an open source software. The facilities and features provided by Bitcoin – the digital currency transfer system has made it very much user friendly. Another name of Bitcoin is cryptocurrency and the biggest Bitcoin platform is Coinbase.

In recent days, many of the companies all around the globe have already started using this digital payment system because of its convenient and user-friendly options. With the passage of time, more facilities are being added to the Bitcoin platform. Many financial analysts have already stated that Bitcoin can be considered as the future of money in different aspects.

Here you will find some interesting Q&As which can lead you to know some interesting facts about Coinbase, currently the world’s largest Bitcoin platform:

Question: Do you think having businesses offer discounts for Bitcoin payments instead of credit card payments is a good if not the only way to interest the general public into adopting Bitcoin?

Answer: Merchants passing Bitcoin cost savings to consumers through discounts and Bitcoin specific loyalty programs are definitely a good way to get more mainstream users to use Bitcoin.

It’s not the only way though, and probably not the most effective way. I think the applications built that enable people to do things they couldn’t do before Bitcoin (micro-payments, cross-border payments, p2p lending, etc.) will be even more effective.

Question: Have you planned to launch outlets around the world, including third world countries?

Answer: Right now anyone in the world outside of the OFAC sanctioned countries can use Coinbase to securely store and use Bitcoin.

We also enable people to buy/sell Bitcoin in exchange for fiat currency in 24 countries. We hope to enable that for many more in the coming months.

Have you taken part in the Q and A section yet? If yes, what are the highlights that attracted you most? You can feel free to share those with us.

A new service called ‘Pure-Central’ has announced the launch of the first peer to peer (P2P) lending and trading platform to cater for the users of multiple different crypto-currencies.

Users of Pure-Central will be able to take out loans denominated in altcoins such as litecoin, Dogecoin, Namecoin, Peercoin, Darkcoin, AuroraCoin, and The World Currency, or to invest in loans to other users. A trading platform will also allow members to trade each of these coins against Bitcoin. Additional altcoins are expected to be added in the future.

Peer to Peer lending sites have proven to be quite popular within the Bitcoin community, with sites like, and offering to match borrowers and lenders for crowdfunded Bitcoin loans. Until now, however, there has not been any service catering to the users of altcoins.

In order to reduce the potential for scammers to use the site to borrow money and then disappear, would-be borrowers must verify their identity with the site, and will then be given a credit score which they can improve by making repayments on loans arranged through the site. Lenders should beware, however, as they are liable for any losers as a result of borrowers failing to repay – something which is a regular occurrence on the Bitcoin sites mentioned above.

Borrowers who succeed in funding a loan through the Pure-Central site will be charged a 0.75% fee, whilst lenders can use the site for free.

In addition to replacing some of the traditional functions of the banking industry with a crypto-currency alternative, the site also opens up the possibility for traders to ‘short sell’ an altcoin by borrowing some, selling it, and then buying back (hopefully at a lower price) to repay the loan at a later date.