Indonesia has taken a substantial stride in its efforts to regulate its burgeoning cryptocurrency sector. As announced this week, the Southeast Asian nation has launched a national crypto asset exchange. This move is designed to provide regulators with transaction records, offering protection for cryptocurrency investors across the country.
Simultaneously, Indonesia has also unveiled a clearing house to supplement its monitoring capabilities in this rapidly expanding industry. This development comes amid a broader shift in the country’s regulatory landscape, as explained by the Commodity Futures Trading Regulatory Agency (Bappebti).
Establishing A Regulatory Framework
Indonesia has an interesting relationship with cryptocurrencies. Although their use as a means of payment is prohibited, investment in these digital assets is permitted.
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The popularity of crypto investments surged during the pandemic across Indonesia. According to Reuters, as of June, more than 17.54 million people in the country had invested in digital assets, a figure that notably outstripped the total number of investors enlisted with the local stock exchange.
Yet, global economic trends, including rising interest rates, have somewhat cooled enthusiasm for cryptocurrencies recently. Between January and June, crypto transactions in Indonesia declined by 68.7% compared to the previous year’s period, totaling 66.44 trillion rupiah ($4.42 billion).
The top five most traded cryptocurrencies were Tether, Bitcoin, Ethereum, Ripple, and Binance Coin, Bappebti reported.
Crypto Asset Exchange: A Safe Haven For Investors and Regulators?
Indonesia’s newly launched crypto asset exchange will serve as a platform for licensed crypto companies, including names like Binance’s Tokocrypto, and Indodax. This move effectively consolidates the crypto trading activities within the country, providing a single point of access for regulators to monitor and maintain transaction records.
The responsibility of the national exchange and clearing house launch is shared among the executives. PT Bursa Komoditi Nusantara will operate the exchange, while PT Kliring Berjangka Indonesia will be in charge of clearing transactions.
According to a statement by Bappebti’s chief Didid Noordiantmoko, PT Tennet Depository Indonesia has been appointed as the crypto asset storage manager.
This transition in the country’s crypto regulatory environment is supported by a new law enacted earlier this year. The legislation advocates for the transfer of regulation, supervision, and oversight of cryptocurrencies from Bappebti to the Financial Services Authorities, with a two-year transition period set in place.
The introduction of a national crypto asset exchange and clearing house in Indonesia is a critical step in the evolution of its crypto market. The government’s commitment to improving investor protection and enhancing regulatory oversight is indicative of its intention to bring more clarity and security to this financial sector.
Related Reading: Indonesia Grants XRP An Official Tradable Status In Crypto Market
As crypto investments continue to attract global interest, it’s likely that other countries may observe Indonesia’s approach to frame their own regulatory strategies.
Meanwhile, the global crypto market has been in a downward trend in the past day dropping by nearly 1%. The crypto market’s total valuation currently stands at $1.162 trillion, at the time of writing.
Featured image from Unsplash, Chart from TradingView