Prior to the transfer of regulatory authority from the commodities authority to the securities authority, the platform is scheduled to launch.
Didid Noordiatmoko, the head of the Indonesian agency that regulates commodity futures trading (Bappebti), declared that a cryptocurrency exchange ought to be established in 2023. The action is a part of a larger financial reform initiative that was started in December 2022.
According to the proposal, the Financial Services Authority (FSA) will take over cryptocurrency regulation within the next two years from Bappebti.
Despite being wary of cryptocurrencies competing with the rupiah, the only legal tender in the nation, Indonesia has been supportive of cryptocurrencies. A recently passed law classifies cryptocurrencies and other digital assets as regulated financial securities, and the central bank has published a white paper outlining its digital currency.
The conceptual design of a digital rupiah, the counterpart of the nation's fiat currency, was released for public discussion in December 2023, according to Bank of Indonesia Governor Perry Warjiyo.
In Indonesia, the use of cryptocurrencies as a form of payment is prohibited by both local laws and Islamic law, which is upheld by about 87% of the country's 273 million inhabitants. The nation, however, classifies cryptocurrency assets as commodities, putting them in the same group as goods like gold or grains.
Indonesia imposed a blanket ban on crypto payments starting in 2017, while trading in digital assets has largely remained legal in the country. In the first days of January, Noordiatmoko revealed that the value of crypto transactions in the country fell by half in 2022 – from 859.4 trillion Indonesian rupiahs (USD 55 million) to 296.66 trillion (USD 19 million).
However, even though the cryptocurrency market saw a decline in activity in 2022, new investors are still pouring money into it. In the first eleven months of the year, there were 16 million cryptocurrency investors in Indonesia, up from 11.2 million at the end of 2021.
With another 151 assets and 10 local coins being evaluated by Bappebti, there are currently 383 crypto assets and 10 local coins that can be traded in Indonesia.
A digital token must be based on distributed ledger technology in order to be traded in Indonesia.The ABI and Bappebti conduct an evaluation known as the ‘analytical hierarchy process’ (AHP) on each local token issuer seeking a spot on the whitelist.
Before Bappebti reviews the asset, the ABI evaluates its market capitalization, the exchanges on which it is listed, as well as the economic advantages and risks related to the token. The ABI then assigns the asset a score.
Due to a lack of personnel, particularly those knowledgeable about the technical aspects of the cryptocurrency industry, Indonesia's regulators are turning to the ABI for help.
Other strategies are also used by local regulators to increase user safety and transparency in the sector. The regulator recently established a help line called ‘Lini Bappebti’ to address complaints and assist with general inquiries about crypto assets. Additionally, Bappebti has increased oversight and monitoring of cryptocurrency traders and exchanges.
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