By
Tolu Ajiboye
April 17th, 2024
In Indonesia today, a total of 383 digital currencies and 10 local tokens can be traded by investors on approved exchanges in the country.
The Indonesian government may be moving in a positive direction with respect to its plans to support the growth of the crypto ecosystem on its shores and is set to float a crypto exchange before the end of this year. As reported by Bloomberg, the country is making this move, which has long been in the plan, ahead of its proposed plans to cede regulations of the industry to a whole new overseer.
The Indonesian Regulatory Shift
The crypto ecosystem in Indonesia is a very subtle one with an age-long ban on the use of digital currencies for payments as far back as 2017. The regulators still permit the trading of cryptocurrencies, albeit, the trading is done in line with the extant rules governing commodities. As a result, the oversight of the industry is being provided by the Commodity Futures Trading Regulatory Agency, known as Bappebti.
In light of the current global financial advancement, the Indonesian government has been making moves to reform the financial ecosystem, one of which will seek to harmonize different aspects of the industry. The reform, dubbed the Financial Sector Development and Reinforcement bill (P2SK), was endorsed by the House of Representatives of Indonesia on December 15.
The reform will be implemented over the next two years and will see the Financial Services Authority (FSA) take over the oversight of the crypto industry in a more distinct pivot to securities trading. The shift in regulators has been described by Suminto Sastrosuwito, a head of Financing and Risk Management of the national finance ministry as an avenue to ensure crypto has an “equal basis with other financial and investment instruments.”
Despite Indonesia still being a relatively warm hub for crypto users, the country has seen a remarkable plunge in ecosystem statistics over the past 2 years. From the 16 million active investors in the industry as of the end of 2021, the number shrank to 11.2 million in the first 11 months of the crypto-winter in 2022. Within the same period, the total value of digital currencies traded plunged from 859 trillion rupiahs to a mere 300 trillion rupiahs ($19.2 billion).
In Indonesia today, a total of 383 digital currencies and 10 local tokens can be traded by investors on approved exchanges in the country. Per the Bloomberg report, as many as 151 assets and 10 tokens are still under review by Bappebti
Indonesia to Protect Its Fiat with Its Crypto Laws
Banning the use of crypto for payment on its shores is a very stern attempt by the Bank of Indonesia to protect the legal tender status of the fiat currency.
However, the apex bank understands the dynamics in the payment evolution and has highlighted its own roadmap with respect to the development of its Central Bank Digital Currency (CBDC) also known as the Digital Rupiah.
According to an update shared in December by the bank’s governor, Perry Warjiyo, the conceptual design of the Digital Rupiah has been done and will soon be made open to the public for constructive discussion.