The Indonesian Financial sector is undergoing a comprehensive reform that extends to the cryptocurrency industry. As part of the reforms, crypto assets trading oversight will be handed over to the Financial Services Authority (FSA).
The Commodity Futures Trading Regulatory Agency (Bappebti) in Indonesia has been in charge of cryptocurrency trading control. However, according to reports, the FSA will take over from Bappebti after the crypto exchange launch sometime this year.
Acting chairman of Bappebti, Didid Noordiatmoko, said the FSA would oversee the regulation of cryptocurrency assets over the next two years. Bappebti is currently evaluating additional 151 assets and Ten (10) local coins. Meanwhile, 383 cryptocurrencies and 10 local coins are already being traded in Indonesia.
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Indonesian Crypto Market Witnessed Continuous Growth Despite Bear Market
The Indonesian cryptocurrency market is constantly growing, with new investors pumping in money despite the 2022 bear market.
According to data, the country recorded 16 million cryptocurrency investors in the first eleven months of 2022. That is an additional increase from the 11.2 million at the end of 2021. In 2022, the trading value dropped from 859 trillion rupiahs recorded in 2021 to 300 trillion rupiahs (worth 25.8 billion USD).
Additionally, Indonesia’s number of crypto exchanges and user base increased rapidly in the last two years. Indodax, a leading crypto exchange, reached 5 million users in 2022, more than a 100% increase from their 2021 number.
Tokocrypto also reported that its users increased to 2 million (eight times their 2020 number) by the end of 2021. The use of mobile applications, with the increasing internet usage in Indonesia, may have contributed to the firms’ rapid user base growth.
Though 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 recognizing cryptocurrencies and other digital assets as financial securities.
Tightening Of Crypto Regulations In Indonesia
However, due to current events in the crypto industry, Indonesia announced that crypto exchange regulations would become strict on October 2022. The country announced an indefinite ban on license issuance to crypto exchanges. The proposal of these new regulations in Indonesia started when Southeast Asia imposed strict laws on cryptocurrencies.
In September 2022, Reuters reported that the Indonesian Ministry of Trade plans to launch a new rule on crypto assets exchanges. The new law requires two-thirds of crypto exchanges’ board of directors and commissioners to be Indonesian citizens.
In a statement at a parliamentary hearing, the acting head of Bappebti, Didid Noordiatmoko, commented on the new rules. Noordiatmoko said the law could prevent the top management from running away when problems arise.
After the Parliamentary hearing in September 2022, deputy trade minister Jerry Sambuaga spoke to reporters. When asked about the plans to launch an Indonesian crypto exchange, he said it might be completed in 2022. But the Indonesian crypto exchange plan is still in motion and will take place in 2023.