OJK Drafts Tokenization Regulation for Real World Assets

The Financial Services Authority (“OJK”) is finalizing a Draft OJK Regulation (“RPOJK”) concerning the Offering of Tokenized Assets or the Tokenization of Real World Assets (“RWA”). This RPOJK is expected to serve as the legal framework for the digital representation of physical assets as legally recognized proof of ownership within the financial sector regulatory regime.

“The RPOJK is currently being finalized to regulate Digital Financial Assets (Aset Keuangan Digital – “AKD”) that represent real-world assets in digital form through tokenization mechanisms,” stated Adi Budiarso, Chief Executive of Financial Sector Technology Innovation, Digital Financial Assets, and Crypto Assets Supervision (IAKD) at OJK.

The substantive provisions of the RPOJK will include, among others, the criteria for RWA eligible for tokenization, procedures for conducting tokenized asset offerings, licensing processes, consumer protection measures, as well as mechanisms for financial recording and reporting by token issuers. OJK has also emphasized the concept of “Unencumbered Assets,” namely assets free from security encumbrances. Accordingly, assets currently under dispute or pledged as collateral under security rights will not be eligible for tokenization.