Indonesia's financial sector is undergoing a comprehensive reform that extends to the cryptocurrency industry. As part of the reforms, oversight of crypto asset trading will be handed over to the Financial Services Authority (FSA).
The Commodity Futures Trading Regulatory Agency (Bappebti) in Indonesia has been in charge of controlling cryptocurrency trading. However, according to reportsthe FSA will replace Bappebti after the crypto exchange launches sometime this year.
Bappebti interim chairman Didid Noordiatmoko said the FSA would oversee the regulation of cryptocurrency assets for the next two years. Bappebti is currently evaluating an additional 151 assets and ten (10) local currencies. Meanwhile, 383 cryptocurrencies and 10 local currencies are already traded in Indonesia.
Indonesian Crypto Market Witnessed Continued Growth Despite Bear Market
The Indonesian cryptocurrency market is constantly growing, with new investors pouring in money despite the 2022 bear market.
According to datathe country registered 16 million cryptocurrency investors in the first eleven months of 2022. That is a further increase from the 11.2 million at the end of 2021. In 2022, the trade value fell from Rs 859 trillion registered in 2021 to Rs 300 trillion rupees (worth $25.8 billion).
Furthermore, the number of Indonesian cryptocurrency exchanges and user base has increased rapidly in the past two years. Indodax, a leading crypto exchange, reached 5 million users in 2022, an increase of more than 100% from their 2021 number.
Tokocrypto too reported that its users increased to 2 million (eight times its 2020 number) by the end of 2021. The use of mobile applications, with the increase in Internet use in Indonesia, may have contributed to the rapid growth of the user base of companies .
Although concerned about the competition between cryptocurrencies and the rupiah (Indonesian legal tender), crypto assets have received massive support in Indonesia. The Indonesian government recently passed a law that recognizes cryptocurrencies and other digital assets as financial securities.
The tightening of crypto regulations in Indonesia
However, due to current events in the cryptocurrency industry, Indonesia announced that regulations on cryptocurrency exchanges would become stricter in October 2022. The country announced an indefinite ban on the issuance of licenses for cryptocurrency exchanges. The proposal for these new regulations in Indonesia began when Southeast Asia imposed strict laws on cryptocurrencies.
In September 2022, Reuters reported that the Indonesian Ministry of Commerce plans to release a new rule on crypto asset exchanges. The new law requires two-thirds of the board of directors and commissioners of cryptocurrency exchanges to be Indonesian citizens.
In a statement at a parliamentary hearing, Bappebti's acting boss Didid Noordiatmoko commented on the new rules. Noordiatmoko said the law could prevent top management from fleeing when problems arise.
After the parliamentary hearing in September 2022, Deputy Trade Minister Jerry Sambuaga spoke to reporters. When asked about plans to launch a cryptocurrency exchange in Indonesia, he said that it could be completed in 2022. But the Indonesian cryptocurrency exchange plan is still underway and will take place in 2023.
