Indonesia Introduces Cryptocurrency Regulations by 2024
Indonesia’s cryptocurrency market is experiencing rapid growth, with revenue reaching US$577.6 million in 2024. The country has become a hub for technological adoption and has seen a significant increase in global crypto adoption. In response to the rising demand, Indonesian authorities are taking steps to regulate the crypto space and protect investors. Recently, the government passed a new crypto regulatory framework.
In this Coinpedia module, we will explore the latest crypto regulations in Indonesia in a step-by-step manner.
Crypto adoption in Indonesia has soared in recent years, making it a key player in the global crypto market. The country’s ranking on the global crypto adoption index rose from 20th to 7th place in 2023, indicating a strong interest and acceptance of crypto in developing countries like Indonesia. According to a report by Coinfest Asia, Indonesia’s potential in the crypto market over the next five years is highly promising.
Indonesia’s crypto market is dynamic and driven by a young, tech-savvy population. The number of crypto account holders in the country has surpassed those with stock market accounts, with over 16 million users. In July 2023, Indonesia became the first nation to launch its National Crypto Exchange, PT Bursa Komoditi Nusantara, also known as the Commodity Futures Exchange. However, the exchange is not intended to compete with global giants like Binance or Coinbase.
The current crypto regulations in Indonesia include Bappebti Regulation No. 8/2021 on Guidelines for Conducting Crypto Asset Physical Market Trading on Commodity Exchanges, as amended by Bappebti Regulation No. 13 of 2022, and Bappebti Regulation number 4 of 2023. The regulatory agency responsible for overseeing crypto assets in Indonesia is the Commodity Futures Trading Regulatory Agency, or Bappebti, which operates under the Indonesian Ministry of Trade. However, with the enactment of Law 4/2023, the regulatory authority over crypto assets will be transferred to the Financial Services Authority, or OJK, by January 2025.
According to the Ministry of Trade Regulation, crypto trading is legal in Indonesia, but the use of crypto as a form of currency is prohibited. The country has approved 229 crypto assets to be traded in the region. To establish a crypto business in Indonesia, investors must meet certain requirements, including having a paid-up capital of at least IDR 50 billion, maintaining equity of at least IDR 40 billion, obtaining PSE accreditation from the Ministry of Communication and IT, having a business plan and financial predictions, and following the prerequisites system set out by Bappebti.
Cryptocurrencies must adhere to Indonesia’s regulations for risk assessment, anti-money laundering, and countering the financing of terrorism. Bitcoin dealers are required to maintain transaction history for at least five years, maintain a server in the country, and allow crypto trading on an Indonesian futures exchange as commodities.
In March 2024, Indonesia’s finance regulator, OJK, issued new crypto regulations in collaboration with Malaysia, Singapore, and Dubai. These regulations aim to promote technological innovation in the crypto sector and will be implemented starting January 2025. OJK is working closely with Bappebti and Bank Indonesia to create a transition team for managing digital financial supervision.
In terms of legal status, crypto is considered a commodity and can be traded on licensed platforms in Indonesia. Bitcoin, NFTs, mining, trading, and DeFi are all legal. Crypto taxation laws currently subject crypto to value-added tax and income tax, but this may change when oversight falls under OJK in 2025.
Indonesia is well-positioned to play a major role in shaping the future of cryptocurrency and blockchain technology. With favorable regulatory policies and a tech-savvy population, the country has become a breeding ground for crypto innovation. The launch of Indonesia’s national platform for crypto assets in 2023 further demonstrates the government’s support for the growth of the crypto market. As Indonesia continues to develop in the crypto space, it is poised to become a major player in the global crypto industry.
In conclusion, Indonesia’s crypto market is experiencing significant growth and has the potential to become a major player in the future. With supportive regulations and a young population eager to embrace crypto, Indonesia is on track for success in the crypto arena.