Indonesia’s Financial Sector is undergoing a comprehensive reform that extends beyond the cryptocurrency industry. As part of the reform, 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 become responsible for the control of digital currency trading. However, according to reports, the FSA will take over from Bappebti after the launch of the crypto exchange later this year.
The acting chairman of Bappebti, Didid Noordiatmoko, said that the FSA will oversee the regulation of cryptocurrency assets in the next two years. Bappebti is currently evaluating an additional 151 assets and Ten (10) local coins. Meanwhile, 383 cryptocurrencies and 10 local coins have been traded in Indonesia.
Indonesian Crypto Market Witnessing Continued Growth Despite Bear Market
Indonesia’s cryptocurrency market continues to grow, with new investors pouring in money despite the 2022 bear market.
According to the data, the country recorded 16 million cryptocurrency investors in the first eleven months of 2022. This is an additional increase from 11.2 million at the end of 2021. In 2022, the value of trading decreased from 859 trillion rupiah recorded in 2021 to 300 trillion rupiah ( fortune 25.8 billion USD).
In addition, the number of crypto exchanges and user base in Indonesia has increased rapidly in the past two years. Indodax, the leading crypto exchange, will reach 5 million users in 2022, more than 100% increase from the number of 2021.
Tokocrypto also reported that its users will increase to 2 million (eight times the number of 2020) by the end of 2021. The use of mobile applications, with the increasing use of the internet in Indonesia, may also lead to the rapid growth of the company’s user base.
Despite concerns about competition between cryptocurrencies and the rupiah (Indonesian legal tender), crypto assets have gained huge support in Indonesia. The Indonesian government recently passed a law recognizing cryptocurrencies and other digital assets as financial securities.
Tightening of Crypto Regulations in Indonesia
However, due to the current events in the crypto industry, Indonesia announced that the regulation of crypto exchanges will become strict in October 2022. The country announced an indefinite ban on the issuance of licenses for crypto exchanges. This new regulatory proposal in Indonesia comes as Southeast Asia implements strict laws on cryptocurrencies.
In September 2022, Reuters reported that the Indonesian Ministry of Trade plans to launch new rules on crypto asset exchanges. The new law requires two-thirds of the board of directors and commissioners of crypto exchanges to be Indonesian citizens.
In a statement at the parliamentary session, the Acting Head of Bappebti, Didid Noordiatmoko, commented on the new rules. Noordiatmoko said the law could prevent top management from fleeing when problems arise.
After the Parliament session in September 2022, the deputy minister of trade Jerry Sambuaga spoke to reporters. When asked about his plans to launch an Indonesian crypto exchange, he said that it could be completed by 2022. However, plans for an Indonesian crypto exchange are still underway and will be launched in 2023.