The significance of electronic seals in modern digital transactions
In the land of bytes and digital flair, we are here with news to share, on Privy Presents, a newsletter specifically curated by the Privy team to discuss digital identity and other closely related topics, delivered to you every Wednesday.?
In today’s digital age, the way we conduct transactions has evolved dramatically. From online banking to the rise of e-commerce, digital transactions have become the backbone of our economic activities?in the sense of guaranteeing security, authenticity, and integrity of these transactions become the primary needs.?
Apart from electronic signatures, electronic seals provide an important layer of security and trust, specifically for organizations. In a world where digital trust gap persists, the need for robust methods to secure digital transactions continues to grow.?
In today’s edition, we would like to delve into the significance of electronic seals in modern digital transaction. ?
What are electronic seals??
Electronic seals (e-seal) are the digital version of a seal stamped onto paper document to certify the integrity and origin of documents. It still serves the same function as conventional seal, but it aims for the use on digital documents.?
To some extent, electronic seals are quite similar to electronic signatures, but it is primarily used by legal entities rather than individuals. Business can use electronic seals to prove their ownership of an electronic document to ensure its integrity and that the document has not been altered. Electronic seals can be applied to all types of electronic documents such as employment contracts, tax declarations, even to invoices and non-disclosure agreements.?
Legal framework and standards for electronic seals?
International regulations and standards have been regulated to aim and ensure the reliability and legal recognition for the use of electronic seals, and Indonesia is not an exception. Based on Minister of Communication and Information Technology Regulation Number 11 of 2022, electronic seal is an electronic data attached, associated, or related to electronic information and/or electronic document to guarantee the origin, and integrity of electronic information or electronic documents used by Business Entities or Agencies (legal entities).?
European Union (EU) also regulates this as a part of many regulations concerning electronic identification and trust services in the digital landscape called eIDAS (electronic Identification, Authentication, and trust Services) in the Article 3 of its regulation saying?
The ‘creator of a seal’ refers to a legal person or entity who creates an electronic seal. ‘An electronic seal’ refers to any data in an electronic form, to ensure the latter’s origin and integrity. ?
eIDAS regulation also defines three types of electronic seals, such as:?
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Role of electronic seals in digital transactions?
As mentioned above, electronic seals play a vital role in verifying the origin of documents, especially in sectors where document integrity is fundamental. Electronic seals help prevent fraud and unauthorized access by ensuring that any tampering with a sealed document is immediately detectable. They can also further add the layer of security in digital transactions.?
However, electronic seals streamline business processes by reducing the need for physical paperwork and administrative tasks. Electronic seals can give positive impacts in certain industries such as: financial sector, to ensure the authenticity of digital contracts, transaction records, and other critical documents. Then in the legal sector, to facilitate the secure exchange of documents in legal proceedings like creating contracts and agreements.?
To conclude, electronic seals become an integral part of a more secured digital transactions for business or any legal entities to protect the integrity of business documents and a way to prove the ownership of an electronic document.?
Thank you for reading and we’ll see you next Wednesday!?
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