Journal of Legal and Social Changes (JLSC) is a double-blind, peer-reviewed, open-access journal established by SCIENTEA PLUS CORP. JLSC aims to publish manuscripts of high-quality research as well as conceptual analysis that studies specific fields of law, with a focus on ratio decidendi from developing countries. The journal covers various perspectives of legal reasoning, including criminal law, civil law, commercial law, customary law, religious law, and state administration. It has one volume with two issues per year (May November). JLSC accepts submissions from all over the world. All submitted articles must be written in English, have never been published elsewhere, are original, and are not under consideration for other publications. To ensure academic integrity, the JLSC Editorial Board screens plagiarism using the Turnitin Program. If plagiarism exceeds 15%, the manuscript will be automatically rejected. JLSC is indexed in Google Scholar, Crossref, Garuda, and SINTA. JLSC is also a member of [LPPI/Forjakum/ILJH]. Additionally, JLSC collaborates with The Translator to enhance the language quality of submitted articles through both translation and proofreading services.
A Legal Analysis of the Shift from the Principle of Corroboration to a Victim-Centered Approach in the TPKS Law
Cases of sexual violence in Indonesia often encounter evidentiary barriers due to strict requirements in the Criminal Procedure Code (KUHAP), including the need for at least two valid pieces of evidence and the principle of unus testis, nullus testis. These provisions tend to disadvantage victims, as such crimes usually occur without witnesses and leave limited physical evidence. This study examines the shift toward a victim-centered approach under Law No. 12 of 2022 on Sexual Violence Crimes (UU TPKS) and its implications for the evidentiary system. Using normative legal research with statutory and conceptual approaches, the study finds that the UU TPKS introduces significant reforms. It expands the scope of admissible evidence and strengthens the evidentiary value of victims’ testimonies, allowing them to be sufficient when supported by at least one additional valid piece of evidence. The law also recognizes scientific evidence, including expert testimony from forensic psychologists and psychiatrists, to support judicial conviction. Overall, this shift marks a transition from a rigid, formalistic evidentiary system to a more substantive, victim-oriented approach. Thus, the victim-centered approach in the TPKS Law represents a progressive reform of criminal procedure aimed at achieving more inclusive and just justice for victims, without neglecting the protection of the rights of suspects or defendants.
Copyright (c) 2026 Journal of Legal and Social Changes https://creativecommons.org/licenses/by/4.0
Legal Protection for Customers in Digital Banking Transactions: A Case Study of Bank Syariah Indonesia (BSI)
The objective of this study is to investigate the transition to industrial digitalization, with a specific focus on the transition of bank security to digital banking. However, this growth is also accompanied by risks arising from a lack of personal data protection, which can negatively impact the development of digital banking services. This includes phishing attempts. This is a method used to steal user information with the aim of obtaining user IDs and passwords. Therefore, a qualitative legal approach is used in this study. Data sources for this study include primary and secondary data. The research findings indicate that, according to Lawrence M. Friedman’s theory, a legal system consists of three main components: legal structure, legal substance, and legal culture. These three elements interact with one another to shape the effectiveness of the legal system. Theoretically, legal restrictions on phishing in Indonesia have not yet been fully effective. This is evident from existing regulatory and law enforcement factors; while they play a crucial role in the administration of justice, they have not yet been able to reduce the number of phishing cases in Indonesia.
Analysis of Personal Data Protection at Bank Syariah Indonesia Under Law No. 27 of 2022
Digital transformation has become BSI's priority in providing sharia-base financial services through digital technology. However, this transformation brings new challenges related to the protection of customers' personal data. This study aims to analyze the rights and obligations of personal data controllers with the implementation of BSI's obligations as a personal data controller based on Law Number 27 of 2022 concerning Personal Data Protection. Using an empirical legal method with a descriptive analysis approach, data was obtained from interviews with BSI and literature studies. The results of the study show data protection gaps at BSI in the form of the absence of leak notifications, lack of transparency in data disclosure to third parties, limited IT security responses, and inefficient data updates. This study recommends the development of data leak notifications, increased transparency, the formation of regional IT teams, and online services to update data.
A Legal Study on Bank Indonesia’s Supervision of Dana as a Digital Financial Services Provider
The implementation of digital banks in Indonesia, especially the DANA application, has begun to be implemented in various regions. The application of the DANA application as a daily payment is not uncommon for individuals to commit digital crimes. The purpose of this study is to find out how the regulations and policies implemented by Bank Indonesia for the DANA application, as well as the role of Bank Indonesia in supervising the DANA application as a digital financial service provider. The method used in this study is a normative approach. This type of research is normative which uses primary, secondary, and tertiary data sources. The results of this study show that the supervision implemented by Bank Indonesia has ensured that the use of the DANA Application has been protected from transaction risks, fraud, and privacy violations. In addition, this supervision creates a digital financial ecosystem that is inclusive, stable, and supports national economic growth. There are 2 benefits that are expected in this study, namely the first theoretical benefit, which is expected to provide understanding and increase knowledge to readers, especially the Indonesian people. The second is the practical benefits of this research that are beneficial to the general public and students, because the existence of this research can add insight and education for Dana application users who are users of digital financial technology.
A Legal Analysis Of Artificial Intelligence (AI) Regulations: A Study Of Consumer Protection In The Banking Sector
The development of artificial intelligence in the banking sector has driven improvements in efficiency and service quality, while simultaneously giving rise to legal risks for consumers. This research aims to analyze the forms of AI implementation in Indonesian banking services and to assess the effectiveness of the Financial Services Authority (Otoritas Jasa Keuangan/OJK) regulations in ensuring consumer protection. This study employs a normative legal research method with a qualitative approach through library research. The data are obtained from statutory regulations, OJK regulations and guidelines, as well as relevant scholarly literature. The findings indicate that the application of AI in credit analysis, electronic know-your-customer (e-KYC), biometric authentication, and chatbots has the potential to weaken customer protection due to the risks of algorithmic bias, the black box phenomenon, and vulnerabilities in personal data. The current OJK regulatory framework is considered ineffective because it remains fragmentary, is dominated by soft law instruments, and has yet to regulate substantive transparency standards and operational obligations for human oversight. This research also highlights the need for clearer, more specific, and more accountable regulations to ensure effective consumer protection in banking services that apply AI-based technologies.
An ANALISIS PENERAPAN GREEN BANKING BERDASARKAN POJK NO.51/POJK.03/2017 DENGAN PENDEKATAN ENVIRONMENTAL, SOCIAL, DAN GOVERNANCE (ESG) PADA BANK BUMN DI INDONESIA
Climate change and environmental degradation encourage the financial sector to play an important role in supporting sustainable development. The banking sector, particulary State-Owned Banks (Bank BUMN) in Indonesia, holds substantial responsibility due to its large-scale financing activities and its close connection with government policies. The implementation of sustainable finance in the banking sector is regulated through Financial Services Authority Regulation (POJK) No. 51/POJK.03/2017 on the Implementation of Sustainable Finance, which requires banks to prepare sustainability reports as a form of applying sustainability principles. This regulation promotes the implementation of Green Banking by integrating Environmental, Social, and Governance (ESG) aspects into banking operations. This study analyzes the implementation of Green Banking in Indonesian State-Owned Banks based on POJK No. 51/POJK.03/2017 and examines the effectiveness of sustainability reporting using the ESG approach. This research employs a normative juridical method with a literature-based approach. The data used consist of secondary data, including laws and regulations, sustainability reports of Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI), and Bank Tabungan Negara (BTN) for the 2020–2024 period, as well as relevant legal and academic literature. Data are analyzed descriptively and qualitatively by assessing the conformity of banking sustainability practices with ESG indicators. The analysis is also conducted using Lawrence M. Friedman’s Legal System Theory, which emphasizes legal substance, legal structure, and legal culture. The findings show that all State-Owned Banks examined have consistently prepared sustainability reports and implemented Green Banking principles. However, the level of transparency and quantitative disclosure of ESG indicators still varies, particularly in environmental and governance aspects. Thus, although POJK No. 51/2017 has been formally implemented, strengthening legal culture and improving transparency remain necessary to ensure that Green Banking implementation becomes more effective and substantive.
Juridical Analysis of Phishing Prevention in the Financial Institution Sector
Phishing crimes are becoming increasingly prevalent as more people use digital technology and online financial services, but the implementation of data protection regulations faces constraints in terms of monitoring and enforcement capacity in the field. This research was conducted using a normative juridical method with a descriptive research nature that relies on an analysis of laws and regulations, expert opinions, and sectoral regulations such as the ITE Law, the Personal Data Protection Law, the Criminal Code, and provisions from the Financial Services Authority (OJK) and Bank Indonesia. The research problem formulation covers two main points: (1) What are the legal regulations for phishing crimes, and (2) How effective is the implementation of legal provisions in efforts to combat phishing crimes in Indonesia. The results of the study indicate that normatively, regulations are quite comprehensive through a combination of criminal regulations, personal data protection provisions, and electronic system security standards in the financial services sector. However, in practice, law enforcement still faces several obstacles such as limited digital forensic capabilities, difficulties in obtaining cross-border electronic evidence, weak coordination between relevant institutions, and low levels of digital literacy in the community. In addition, financial institution security standards are not yet fully uniform, so there are still gaps that can be exploited by phishing perpetrators. This study concludes that the effectiveness of phishing countermeasures is suboptimal because the implementation of the legal formula has not been as robust as its normative concept. Therefore, a more comprehensive approach is needed through increased investigator capacity, updated digital forensic procedures, tightened security standards for electronic system providers, strengthened inter-agency coordination, and regular public education to ensure more effective phishing prevention and enforcement efforts and protect users of digital financial services.
The Implications Of Artificial Intelligence Use On Legal Liability In Indonesia
This study is motivated by the increasing use of Artificial Intelligence (AI) across various sectors in Indonesia, which raises new challenges regarding the clarity of legal accountability, especially when AI systems produce decisions or actions that cause harm. The rapid development of AI, which outpaces existing regulations, leads to several central research questions: how AI is positioned within Indonesia’s legal system, who should bear responsibility when algorithm-driven errors occur, and to what extent current laws can accommodate the risks posed by such technologies. The aim of this research is to analyze the relationship between AI and legal accountability, identify regulatory gaps, and provide a comprehensive understanding of the need for legal reform. The study employs a qualitative juridical-normative approach through analysis of statutory regulations and relevant literature. The findings indicate that current regulations do not explicitly address AI’s legal status, creating uncertainty in determining responsible actors when harm occurs. Moreover, existing legal instruments remain fragmented and insufficient to address the complexity of AI technologies. This research concludes that Indonesia requires comprehensive, responsive, and adaptive regulations to ensure legal certainty and adequate public protection as AI continues to evolve.
Karen Saleha Makadina Yeti Nindiaswari Ediyanti
Consumer Protection In Online Sales Transactions Through Instagram And Facebook: Analysis Of Protection According To Positive Law And Dsn Fatwa
This study analyzes consumer protection in online sales transactions conducted via Instagram and Facebook based on Law Number 8 of 1999 on Consumer Protection, Law Number 11 of 2008 jo. Law Number 19 of 2016 on Electronic Information and Transactions, Government Regulation Number 80 of 2019 on Trading Through Electronic Systems, and the National Sharia Council Fatwa Number 110/DSN-/IX/2017 on Sales Contracts via Social Media. The research employs a normative juridical method with statutory and conceptual approaches, using qualitative analysis of primary, secondary, and tertiary legal materials. The findings show that the Consumer Protection Law regulates consumer rights and business actors’ obligations, the EIT Law regulates the validity of electronic transactions and electronic evidence, Government Regulation Number 80 of 2019 regulates trading through electronic systems, and the DSN- Fatwa affirms the validity of contracts while prohibiting gharar and deceit. Preventive and repressive protections are implemented through the right to accurate information, the duty to compensate, the role of the Consumer Dispute Settlement Board, Article 378 of the Criminal Code, Article 1239 of the Civil Code, Article 28 of the EIT Law, and supervision by the Ministry of Communication and the Ministry of Home Affairs supported by complaint features on Meta platforms. However, effectiveness is still limited by weak seller verification and constrained dispute resolution mechanisms on social media.
Analysis of Bank Indonesia Regulations on QRIS: Legal Implications and Compliance with Its Use
Quick Response Code Indonesian Standard (QRIS), which prioritizes legal and compliance aspects in Indonesia's digital payment ecosystem. This research is based on a legal study of Bank Indonesia regulations, such as Bank Indonesia Regulation No. 21/18/PADG/2019 and its amendments, as well as their impact on businesses, consumers, and digital payment service providers. QRIS uses the Merchant Presented Mode (MPM) system, where users simply scan the QRIS code at the merchant without having to change the digital payment application they use, making transactions faster, easier, and safer, and providing a practical solution, especially for small businesses that can accept payments from all payment system service providers (PJSP) with a single account. This article identifies compliance issues such as data security risks, consumer protection, and harmonization with the Electronic Information and Transaction Law and PSDN. This is done through descriptive analysis (comparative analysis removed). Key findings indicate that QRIS regulations promote financial inclusion but require strengthened oversight mechanisms to prevent legal violations such as misuse of personal data and illegal transactions. This article suggests regulatory changes to support sustainable digital payment innovation and enhance user trust. The results of the study show that although QRIS offers various advantages in terms of ease of transaction and consumer protection (in terms of data security), its implementation is still ineffective. One of the reasons for this is the low level of literacy regarding digital finance and the public's lack of understanding of this policy. Therefore, intensive efforts are needed in terms of socialization and education, as well as stricter supervision of the implementation of security standards in transactions through QRIS.
Legal Responsibility In The Protection Of Customers' Personal Data By Sharia Financial Institutions
The rapid development of digital technology in the banking sector has increased the vulnerability of customers’ personal data, including in Islamic financial institutions. Although Indonesia has established legal frameworks through the Personal Data Protection Law and the Islamic Banking Law, the implementation of supervision over personal data protection obligations still faces significant challenges. This study aims to examine the effectiveness of personal data supervision in Islamic financial institutions by applying Lawrence M. Friedman’s legal system theory and to analyze the urgency of establishing an independent supervisory body. This research employs a qualitative method with a normative-juridical approach based on the analysis of statutory regulations, legal literature, and relevant doctrines. The findings indicate that the supervision of personal data protection has not been fully effective due to weak integration between legal substance, institutional structure, and legal culture. Moreover, the absence of a dedicated independent supervisory authority results in limited enforcement and legal certainty for customers. Therefore, strengthening supervisory regulations and establishing an independent oversight institution are necessary to ensure optimal and sustainable protection of personal data in Islamic banking.
Legal Protection For Investors In Sharia Digital Securities In Indonesia: Regulatory And Implementation Challenges
The transformation of financial technology (fintech) in Indonesia's Islamic capital market has created vast opportunities for financial inclusion, but has also given rise to new legal risks related to the validity of electronic documents, personal data security, and the integrity of Islamic contracts. Risks such as digital identity forgery, document manipulation, and cyberattacks can undermine public trust and hamper the sector's growth if not accompanied by adequate legal protection. This study uses a qualitative approach with a normative juridical method that focuses on reviewing regulations and legal literature related to the protection of Islamic digital securities investors in Indonesia. Data were collected through a literature review of relevant laws and regulations, authority regulations, and fatwas, which were then analyzed descriptively using content analysis techniques to identify protection mechanisms and barriers to their implementation. The results reveal that investor protection mechanisms are built through three integrative layers: regulatory (based on the ITE Law, the PDP Law, and the DSN-MUI Fatwa), technological (through KYC systems, encryption, and digital signatures), and sharia (through the role of the Sharia Supervisory Board). However, the effectiveness of this protection remains hampered by weak digital identity verification, sophisticated cybersecurity risks, regulatory fragmentation between the Financial Services Authority (OJK), the Indonesian Ulema Council (DSN-MUI), and the National Sharia Agency (BASYARNAS), and limited technological literacy among sharia supervisors. In conclusion, strengthening legal protection requires policy harmonization across authorities and the development of unified national guidelines that combine digital security standards with sharia audit standards that are adaptive to future technological innovations such as blockchain and national metadata integration.
Effectiveness of OJK Supervision in Maintaining National Financial System Stability
This study evaluates how effectively the Financial Services Authority (OJK) carries out its supervisory role in maintaining national financial system stability through institutional accountability, supervisory capacity, and consumer protection. Several challenges to Indonesia’s financial stability include the dominance of the banking sector, external vulnerabilities, unequal financial access, and limited data regarding the household sector and non-bank financial institutions. Events such as the Jiwasraya and Asabri cases, along with the rise of illegal fintech platforms, illustrate gaps in supervision and law enforcement by OJK. This study employs a qualitative method with a case study approach, supported by document analysis, including regulations, OJK annual reports, court decisions, and financial sector policies, covering the period from 2019 to 2024. The findings indicate that OJK has made improvements in oversight through data integration, risk-based supervision, and the adoption of technological tools. Nonetheless, the effectiveness of these measures continues to face challenges related to data quality, human resource capacity, inter-agency coordination, and limitations in consumer protection mechanisms. The significance of this research lies in the need for more adaptive, transparent, and collaborative supervisory reforms, enabling OJK to function as a reliable and responsive guardian of financial stability. It is hoped that these findings can contribute to the development of supervisory policies that prioritize stability and fairness for the public.
Ridho Gantheng Seno Valeandrisga Valeandrisga
Evaluation Of Algorithmic Bias Potential In Ai Systems Within The Framework Of Personal Data Protection Laws
Digital transformation has brought significant changes to the financial services sector, particularly through the application of Artificial Intelligence (AI) in customer risk analysis. AI improves efficiency and accuracy, but the extensive use of sensitive personal data raises risks of privacy violations, data misuse, and algorithmic bias, which can undermine fairness. Indonesia enacted Law Number 27 of 2022 on the Protection of Personal Data (UU PDP) as the legal foundation, yet this regulation has not fully anticipated the challenges and complexities of AI technology, such as algorithm transparency, independent audits, and accountability for automated decisions. This study employs normative legal research with statutory, conceptual, and case approaches to assess how well the UU PDP accommodates AI developments and the impact of algorithmic bias in customer risk analysis. The findings indicate that current regulation needs to be strengthened with specific technical rules, the establishment of independent supervisory bodies, and the implementation of AI governance in financial institutions. This research recommends adaptive regulations and inter-agency coordination to ensure effective and fair personal data protection in the digital era.
AI Integration in Financial Institutions: Implications for Transparency and Data Security
This study was conducted to determine the effectiveness of fraud detection in the banking and financial technology (fintech) sectors. With the presence of a new innovation such as Artificial Intelligence (AI), it is expected to be able to analyze the impact of integration on the operational transparency of financial institutions and identify potential risks and challenges of data security due to the use of AI, as well as to develop recommendations for governance and regulatory strategies that support the ethical and safe implementation of AI. This method uses a normative juridical approach with a descriptive-analytical nature to examine the protection of personal data in the use of artificial intelligence (AI) for fraud detection in the banking and fintech sectors. The normative approach is a review of the legal and ethical aspects of customer data protection. AI integration can increase efficiency and accuracy in financial processes, including detecting fraud and risk management. The application of AI can create potential vulnerabilities to data security due to the use of big data and automated algorithms. The transparency of this AI system is still a focus of challenges because many algorithms are still black box (not easy to understand). Stricter regulations and data security standards are needed so that the application of AI does not harm customers. The purpose of this research is to inform policymakers' considerations in formulating AI regulations in the financial sector, and to provide financial institutions with insights into strengthening their technology transparency and security systems. This research provides a novel approach, presenting an integrated analysis of AI technology, transparency, and customer data security within the context of Indonesian financial institutions. Combining legal and technological approaches provides an ethical perspective on AI implementation, which has previously focused solely on technical aspects.
Financial Institutions, Artifical Intelelligence, Banking
Consumer Protection of Chatbot Use in Banking Services in Indonesia
Indonesia has undergone rapid digital transformation in the banking sector through the use of artificial intelligence (AI), particularly in the form of chatbots and service automation systems. However, this development also raises legal challenges related to personal data protection and consumer safety. This study aims to examine the legal regulations on the use of AI in banking services in Indonesia and analyze the legal protection for consumers who use AI-based services. The research method used is normative legal research with a legislative and conceptual approach, through a review of the Financial Services Authority (OJK) policies, including Financial Services Authority Regulation (POJK) Number 22 of 2023 concerning Consumer and Community Protection in the Financial Services Sector, which regulates obligations of transparency, information system security, cybersecurity, and the responsibility of PUJK in providing fair and safe services for consumers. The results of the study show that Indonesia has a general legal basis for regulating the use of AI in the banking sector, but there are no specific regulations that explicitly regulate algorithmic responsibility, AI model accountability, and consumer protection mechanisms in AI-based automated services. Therefore, specific regulations and strengthened AI governance in banking are needed, prioritizing the principles of transparency, data security, and consumer rights protection to create fair, safe, and reliable banking services.
Legal Challenges and Opportunities for Digital Transformation of Credit Unions in the Digital Age
Digitalisation opens up considerable opportunities for cooperatives to increase the efficiency, transparency and reach of their services. However, the use of digital technologies also brings with it complex legal and institutional challenges, especially for cooperatives that are not yet so advanced in terms of infrastructure, personnel or organizational management. Regulatory gaps and the limited ability of cooperatives to adapt to the digital age are the key issues that require in-depth analysis. The aim of this research is to examine the challenges and opportunities faced by savings and credit cooperatives in the digital age, especially from a legal and institutional perspective. The research uses a normative method with a legal and conceptual approach. The data were collected through a literature review of laws and regulations, scientific literature, and other relevant documents, and then qualitatively analyzed using a descriptive-analytical approach. The results show that the current regulations, in particular Law No 25/1992 on cooperatives, do not explicitly take into account the aspects of cooperative digitalisation. On the other hand, cooperatives are obliged to comply with the requirements of the ITE Act and the PDP Act, which require technological readiness and data security, which most cooperatives do not yet have. At the institutional level, the main challenges are the low digital skills of management, limited infrastructure and the lack of technical regulations to implement digital transformation. Nevertheless, with the support of government policies and the potential integration of cooperatives into the digital financial technology ecosystem, the opportunities for the digitization of cooperatives still remain promising.
Copyright (c) 2025 Journal of Legal and Social Changes https://creativecommons.org/licenses/by/4.0
Legal Analysis of Sharia Banking Regulations: A Case Study at BCA Syariah
The development of the Islamic banking industry in Indonesia over the past two decades has demonstrated significant growth, driven by government regulations and increasing public demand for an inclusive financial system based on Islamic principles. Nevertheless, the industry continues to face major challenges, including low levels of Islamic financial literacy, limited technological innovation, and intense competition from both conventional and other Islamic financial institutions. This study employs a literature review method by analyzing scientific journals, industry reports, regulations, and statistical data related to the transformation of Islamic banking in Indonesia. The focus is on PT Bank BCA Syariah’s strategies in addressing these challenges, which include strengthening service digitalization, implementing governance and risk management principles, enhancing capital structure, and conducting community education programs. The findings indicate that the implementation of digital services such as the BSya application, sharia-based product innovations, and strategic collaborations with various partners have expanded service access, promoted sharia financial inclusion, and strengthened BCA Syariah’s competitive position at the national level. Furthermore, BCA Syariah’s ability to maintain healthy financial ratios, obtain information security certifications, and integrate sustainable finance principles reflects its contribution to building a modern and competitive Islamic banking ecosystem. In conclusion, the transformation of Islamic banking carried out by BCA Syariah has not only improved the bank’s financial performance but also provided practical implications for the broader development of the Islamic finance industry in Indonesia. Specifically, it has created innovative, sustainable, and Sharia-compliant service models that support inclusive and equitable national economic growth.
Legal Review of the Application of Sharia-Based Services in Pawnshops in Strengthening the National Economy
The Islamic financial system is a rapidly growing alternative in Indonesian society, where the majority of the population is Muslim. One of the financial instruments that plays an important role in supporting microfinance is Islamic pawnshops. This article aims to examine the legal application of the Islamic pawnshop system in Indonesia, both in terms of the regulations that govern it and its practical implementation in the field, as well as the obstacles encountered in its implementation. The approach used is a normative legal approach. This study discusses the implementation of the Islamic pawnshop system in supporting the national economy and the obstacles faced in its implementation. The results of the study show that Islamic Pawnshops have a positive legal basis and Islamic law, and play a strategic role in promoting financial inclusion and community economic empowerment through providing access to capital, financing based on rahn contracts, and providing financing products specifically designed for the needs of MSMEs. However, there are still challenges in terms of socialization, understanding of sharia contracts, and legal protection for consumers. Therefore, strengthening regulations and increasing literacy in sharia economic law are important aspects in supporting the sustainability of this system as part of national economic development.
Legal Review Of The Effectiveness Of Islamic Banking Financing On Small And Medium Enterprises In Indonesia
This study analyzes the effectiveness of financing provided by Islamic banks for the development of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. MSMEs play a strategic role in the national economy by employing more than 97% of the workforce and contributing over 60% of the Gross Domestic Product (GDP). Despite their importance, MSMEs continue to face significant obstacles in accessing financing from conventional institutions, including limited collateral and low levels of financial literacy. In this context, Islamic banking offers an alternative financing system grounded in fairness, partnership, and the prohibition of usury, with instruments such as murabahah, mudharabah, and musyarakah. This study addresses two main issues: (1) the characteristics of Islamic banking contracts and financing schemes tailored to MSME needs, and (2) the extent to which Islamic financing enhances MSMEs’ capacity, turnover, and sustainability. Using a descriptive qualitative method through literature review and interviews, the findings show that Islamic financing contributes positively to MSME growth. However, its implementation is hindered by low financial literacy, limited accessibility, and conservative practices within financial institutions. Therefore, strengthening regulatory frameworks, developing adaptive financial products, and integrating financing with education and business mentoring are essential steps. In conclusion, Islamic banking financing has the potential to significantly empower MSMEs, but its success depends on consistent legal support, innovative product design, and improved financial literacy. These measures will ensure that Islamic finance becomes a more inclusive and sustainable instrument for Indonesia’s economic development.
Legal Analysis of the Application of Sharia Principles in Sharia Pawnshops
Pegadaian Syariah is a sharia-based financial solution that offers pawn services in accordance with Islamic principles, particularly the rahn contract. In practice, the application of sharia principles aims to provide fair and transparent financing alternatives that are free from riba, gharar, and maysir. However, the implementation of sharia principles in Sharia Pawnshops faces various challenges, especially in managing financing risks that can affect the financial stability of these institutions. This study aims to analyze the application of sharia principles in rahn contracts and their impact on financing risks in Sharia Pawnshops. The method used is qualitative with a literature study approach, collecting data from journals, books, and related regulations. The results of the study indicate that the application of sharia principles can minimize moral hazard risks and increase public trust in the sharia financial system, but still requires optimal risk management.
Analysis of the Role of Economic Law in Improving Community Welfare
The economy emphasizes ethical values such as honesty, transparency, and fairness in transactions, differing from conventional economic systems that often pursue maximum profits without considering moral and social aspects. In this economy, transactions involving fraud, uncertainty (gharar), and speculation (maysir) are prohibited because they can harm one of the parties. With this principle, economics seeks to create a healthier and more sustainable trading system so that the welfare of society can be maintained in the long term. The design of this research is a literature review, which is a description of theories, findings, and other research materials obtained from reference sources to be used as the basis for research activities. A literature review contains reviews, summaries, and the author’s thoughts on several sources. With clear and effective legal regulations to address income distribution inequality, it is hoped that a more prosperous and equitable society can be created. Therefore, it is important for the government and related institutions to work together in implementing law-based economic policies to create equal opportunities and access for all levels of society, so that income distribution inequality can be minimized and the welfare of society can be achieved comprehensively.
Challenges and Strengthening of the Islamic Banking Security System in the Digital Age
The development of digital technology in the era of the Fourth Industrial Revolution has changed the landscape of the global financial industry, including the Islamic banking sector. Digitalization is no longer an option, but a strategic necessity to maintain competitiveness, expand service coverage, and improve operational efficiency. In Indonesia, Islamic banking has shown positive growth in line with increasing public awareness of Islamic-based finance and the wider penetration of digital technology. This article discusses the dynamics of digital transformation in Islamic banking, focusing on challenges and strategies for strengthening digital security systems. The research uses a qualitative-descriptive approach, utilizing secondary data from academic literature, financial institution reports, and relevant regulations. The results of the study show that although the adoption of technologies such as mobile banking, big data, artificial intelligence (AI), and blockchain has driven significant growth, Islamic banking still faces serious challenges. These challenges include cybersecurity risks, infrastructure limitations, a lack of competent human resources, low digital literacy, and compliance obligations with regulations such as the Personal Data Protection Act.In response to these challenges, strengthening the digital security system has become a strategic element that is not only technical in nature but also reflects an ethical and spiritual commitment to protecting customers' assets (ḥifẓ al-māl) in accordance with maqāṣid al-syarī‘ah. The recommended strategies include the application of the latest security technology, increasing human resource capacity, and developing cyber risk management policies based on sharia principles. With a holistic approach, digital transformation is expected to strengthen the competitiveness and sustainability of Islamic banking in the digital era.
Legal Analysis of Central Bank Digital Currency (CBDC) Regulation in the Indonesian Payment System: A Comparative Study with the Implementation of E-CNY in China and Sand Dollar in the Bahamas
This study examines the legal framework governing payment instruments in Indonesia and the development of Central Bank Digital Currency (CBDC) as part of the digital transformation of the financial system. The research focuses on two main issues: the legal regulations related to legal tender in Indonesia and the role of CBDC in strengthening the national payment system. Using a normative juridical method through literature study, this research analyzes legislation, Bank Indonesia policies, journal articles, and other relevant sources. The results show that the Rupiah is the only legal tender in Indonesia, available in three forms: paper, metal, and digital. Bank Indonesia holds full authority to issue and manage the digital Rupiah, which is currently still under development. The findings also highlight that the development of CBDC is not merely a technological innovation, but a strategic effort to expand financial access, accelerate transactions, enhance efficiency, and support digital economic growth. In conclusion, the study emphasizes the importance of comprehensive preparation for CBDC implementation, including the establishment of clear legal regulations, the strengthening of technological infrastructure, and public education on the use of digital payment instruments. Thus, this research provides an in-depth overview of the future of Indonesia’s payment system, in which digital currency is expected to play an increasingly vital role.