By Michael Scott
The fourth most populous country in the world, Indonesia, is launching a state-backed cryptocurrency. Regulators in Indonesia proposed the new crypto exchange last year and tasked the project team to start the preparation. The minister of trade, Zulkifli Hasan, confirmed on February 2 that the new cryptocurrency would be launched in June after a long delay. Hasan argued that the team behind the project required ample time.
Indonesia Push for Crypto Adoption
Deputy trade minister Jerry Sambuaga echoed last September that in the attempt to protect the consumer, the new crypto asset under development might require more time. Sambuaga reaffirmed that developing a system with multiple digital assets would take more time than expected.
According to Sambuaga, Indonesia has more than 383 approved crypto firms, and the number continues to increase. The regulators are still negotiating the list of crypto firms to be integrated into the system.
The Indonesia Blockchain Association (IBA) was mandated to approve any crypto firms operating within the country.
Why is Indonesia Introducing Crypto Assets in the Export Industry?
Beyond this, Indonesia has been a burgeoning center for exports, and the regulators are targeting to introduce cryptocurrency as a payment method. In September 2022, Sambuaga revealed that the country ranks among the best coal and palm oil exporting countries. He restated that launching digital assets in the export industry could inspire Indonesia to be a crypto center in Asia.
Additionally, Indonesia outperforms China in the adoption of cryptocurrency in regional trade. Following this, launching the crypto asset (bourse) would be the first in Asia, positioning Indonesia at the pinnacle of blossoming.
However, Indonesia might face fierce competition from a crypto-friendly country Hong Kong which has struggled to push for crypto adoption. Last December, Hong Kong launched the first-ever Bitcoin exchange-traded fund (ETF) to attract more foreign investment to improve its economic performance.
Later, in partnership with tech giant Samsung Hong Kong developed an innovative Bitcoin Futures ETF sub-fund.
Fierce Competition in Asia Crypto Industry
Global Crypto Adoption data depicts Indonesia’s top 20 list in 2022. Crypto activities generated more than $16B, outshining transactions conducted through traditional financial methods in the previous year. The revelation is evident with over 383 approved crypto firms operating in Indonesia with regulators gearing for additional entities entry into the ecosystem.
Despite the gossip from Indonesian religious leaders, the crypto-savvy generation in the country is booming. Recently, over 5M Indonesian have invested in crypto, and the government is attempting to develop more crypto-friendly regulations to increase the number.
In January, the Indonesia Financial Market Authority (FMA) took over the Commodity and Futures Supervisory Agency (CoFTRA), regulating financial and non-financial institutions.
Besides the delays in crypto adoption, Indonesia continues to make exciting moves in the crypto realm. On January 23, the Indonesian Financial Market authority introduced new regulations impacting changes in crypto classification in the country.