Legal Reconstruction of Blockchain Fiduciary Security Needed to Guarantee Execution and Creditor Protection in Indonesia

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FORMOSA NEWS

Affandi, a researcher and legal practitioner from AMR Legal Consultant in Indonesia, conducted a normative legal study published in July 2026 to address the critical gaps between Indonesia's traditional fiduciary security laws and modern blockchain-based digital assets. The study highlights an urgent need to reconstruct fiduciary execution mechanisms to guarantee legal certainty and creditor protection in an increasingly digitized financial ecosystem.

Indonesia's Law No. 42 of 1999 on Fiduciary Security was originally established for conventional movable assets that involve physical possession. However, digital assets operate on decentralized blockchain networks controlled cryptographically through private keys rather than physical custody. This operational mismatch is further complicated by Constitutional Court Decision No. 18/PUU-XVII/2019, which mandates judicial intervention when default is contested, rendering traditional physical execution procedures ineffective for digital assets.

The study applied a normative legal research design utilizing statutory, conceptual, and case approaches. Primary legal materials analyzed include the Fiduciary Security Law, the Electronic Information and Transactions (ITE) Law, and Financial Services Authority (OJK) Regulation No. 27 of 2024 on Digital Financial Asset Trading. Through doctrinal legal reasoning, the research examined normative gaps to formulate an updated execution architecture.

The key findings of the research show that:

• Conventional fiduciary execution procedures are structurally incompatible with blockchain assets, which depend on cryptographic private key control rather than physical asset surrender.
• Significant regulatory fragmentation exists between civil collateral law and digital asset financial regulations, leaving digital assets without dedicated fiduciary registration pathways.
• Legal certainty requires regulatory reconstruction through digital fiduciary registration, licensed custody systems, and smart contract-based automated execution mechanisms.

Reconstructing the legal framework provides essential clarity for commercial lenders, fintech businesses, and regulatory bodies. By establishing clear, executable rules for digital collateral, Indonesia can create a secure investment environment, protect creditors against default risks, and encourage financial technology innovation. Affandi emphasizes that integrating legal enforcement authority with digital infrastructure is vital to maintaining the functionality of modern collateral law.

Author Profile:

• Affandi, S.H.: Researcher and legal practitioner at AMR Legal Consultant, Indonesia, specializing in corporate law, digital asset legality, and dispute resolution.

Research Source:

• Journal Article Title: Reconstruction of the Fiduciary Security Execution Mechanism for Blockchain-Based Assets Ensuring Legal Certainty
• Journal Name: International Journal of Management Analytics (IJMA)
• Publication Year: 2026
• DOI: https://doi.org/10.59890/ijma.v4i3.31