By Richard Hines
The Indonesian government plans to establish a cryptocurrency exchange in 2023 and then transfer regulatory responsibility to the Financial Services Authority (FSA).
Regulatory Responsibility To Be Transferred In The Country
Didid Noordiatmoko, the acting chairman of Indonesia’s Commodity Futures Trading Regulatory Agency (Bappebti), has announced that the Financial Services Authority (FSA) will take up regulatory control of crypto assets in Indonesia for the next two years.
Bappebti currently oversees the trading of both crypto assets and commodity contracts in Indonesia.
The planned transfer of regulatory control is part of a broader financial sector reform, and the government aims to establish a cryptocurrency exchange by that time as well.
Bappebti, the Indonesian regulator, is currently evaluating another 151 assets and 10 local coins, bringing the total number of crypto assets that can be traded in Indonesia to 383. Despite a decline in activity in the crypto market in 2022, it has continued to attract new investors.
In 2022, the number of cryptocurrency investors in Indonesia increased from just over 11 million at the end of 2021 to 16 million. Over that same period, the trading value decreased significantly.
The Rupiah Remains The Only Legal Currency
Although Indonesia may have initial reservations about cryptocurrencies potentially competing with the national currency, the rupiah, the country has been supportive of digital assets overall.
In fact, a recent law recognized cryptocurrencies and other digital assets as regulated financial securities, and the central bank has even released a White Paper outlining its plans for a digital currency. It’s worth noting that the rupiah remains the only legal cash in Indonesia.
In October 2022, Indonesia announced plans to tighten regulations on cryptocurrency exchanges, including a ban on licensing for such exchanges. It was not clear when this ban would be lifted.
The move followed the proposal of new regulations by Indonesia’s parliament in response to the booming cryptocurrency market in the region, which has experienced a volatile year in 2022. Despite this, the demand for cryptocurrencies has remained strong in Southeast Asia.