The cryptocurrency market in Indonesia is developing at a very fast pace. Indonesia's cryptocurrency market has grown significantly in recent years, with revenue reaching US$577.6 million in 2024. The country has become a hotbed for various technological applications in the past few years. It has seen a boom in the Global Cryptocurrency Adoption Index, rising from 20th place to 7th place in 2023. With rising demand, authorities in Indonesia are showing interest in regulating the cryptocurrency space for the welfare of investors. Recently, the government in Indonesia passed a new regulatory framework for cryptocurrencies.
In this module offered by Coinpedia, we will understand the latest crypto regulations in Indonesia in a step-by-step manner.
Crypto adoption in Indonesia
The cryptocurrency market in Indonesia has grown in recent years and has become a hotbed for various digital assets. Indonesia has seen a boom in the Global Cryptocurrency Adoption Index, rising from 20th place to 7th place in 2023. This rapid increase shows the huge interest and acceptance of cryptocurrencies in developing countries like Indonesia.
In a recent report by Coinfest Asia, Indonesia has emerged as a major global player in the cryptocurrency space, and its potential over the next five years is quite impressive. The cryptocurrency market in Indonesia is dynamic and filled with a young, tech-savvy population. The number of cryptocurrency account holders in Indonesia has already surpassed those with stock market accounts to more than 16 million users.
Indonesia became the first country to launch a national cryptocurrency exchange PT Bursa Komoditi Nusantara, also known as a commodity futures exchange in July 2023. Indonesia's national cryptocurrency exchange does not want to compete with global giants like Binance or Coinbase.
Crypto regulations in Indonesia in 2024
The current regulations applicable in Indonesia are as follows:
- Babbiti Regulation No. 8/2021 Concerning Guidelines for the Practice of Trading Crypto Assets in the Physical Market on Commodity Exchanges as amended by Babbiti Regulation No. 13 of 2022.
- Babbitty Regulation No. 4 of 2023 amending Commodity Trading Supervision Authority Regulation No. 11 of 2022 regarding determining the list of crypto-assets traded in the physical market for crypto-assets.
- Law No. (4) of 2023 regarding developing and strengthening the financial services sector (Comprehensive Financial Law).
The cryptocurrency regulator in Indonesia is the Commodity Futures Trading Regulatory Agency, known as Bappebti, which is under the supervision of the Indonesian Ministry of Trade and regulates futures trading, including crypto asset trading. With the issuance of Law No. 4/2023, regulatory authority over cryptoassets will be transferred to the Financial Services Authority, or OJK, by January 2025.
According to the Ministry of Commerce, cryptocurrency business regulations stipulate that trading is legal in Indonesia. Indonesia bans the use of cryptocurrencies as money but allows them to be traded as commodities. 229 crypto assets have received approval from Indonesia's Commodity Futures Trading Regulatory Agency to be traded in the region.
To establish a cryptocurrency company in Indonesia, an investor must become an authorized physical trader of crypto assets and meet the following requirements:
- Must have a paid-up capital of at least IDR 50 billion.
- Maintain shareholders' equity of at least IDR 40 billion.
- Obtaining PSE accreditation from the Ministry of Communications and Information Technology (Penyelenggara Sistem Elektronik).
- You have a business plan and financial projections for the next 24 months.
- The basic requirements system laid down by Babbitty must be followed.
Cryptocurrencies must adhere to the country's risk assessment, anti-money laundering and counter-terrorism financing regulations. The rule stipulates that bitcoin traders must keep a history of transactions for at least five years, maintain a server in the country, and allow cryptocurrencies to be traded on the Indonesian Futures Exchange as commodities and not some payment instrument.
In March 2024, Indonesia's financial regulatory authority issued new regulations for cryptocurrencies! OJK collaborated with Malaysia, Singapore and Dubai to develop a crypto policy framework. The OJK has issued new regulations for implementing technological innovation in the cryptocurrency sector, which will apply to cryptocurrencies from January 2025. This includes guidance on protecting customers, creating test spaces (sandboxing) for new technology, and reporting results from these tests. OJK is working closely with the current cryptocurrency regulator, Bappebti and Bank Indonesia, to establish a transition team to manage the shift in digital financial supervision.
Overview of the legal situation
Indonesia has legalized cryptocurrencies as a commodity that can be traded on licensed platforms but has banned their use as a means of payment.
| Bitcoin | Legal, but only as a commodity |
| NFTs | legal |
| Mining | legal |
| commerce | legal |
| Decentralized finance | legal |
Crypto tax laws
The country currently taxes cryptocurrencies as commodities, but that may change in 2025 when oversight falls under the Financial Services Authority, OJK. Cryptocurrencies are treated as a commodity and are therefore subject to VAT and income tax. In 2022, Indonesia announced a 0.1 percent income tax on cryptocurrency income and a value-added tax on cryptocurrency purchases.
Future prospects and challenges
Cryptocurrency and blockchain technology are rapidly developing fields that have the potential to change the global economy. As one of the largest economies in Southeast Asia, Indonesia is well positioned to play a major role in shaping the future of these technologies. The Indonesian government has created a suitable regulatory environment for the development of cryptocurrencies and blockchain. The launch of a cryptocurrency exchange in Indonesia by the Commodity Futures Trading Regulatory Agency (Bappebti or CoFTRA) signals the government's support for the growth of the country's cryptocurrency market. This policy, combined with the growing number of tech-savvy young people, has created a favorable ground for innovation in the field of cryptocurrencies.
On July 20, 2023, Indonesia opened a national platform for crypto assets, serving as a trading venue and clearinghouse. This wonderful initiative aims to provide regulatory authorities with comprehensive records of transactions, thus enhancing their supervisory capabilities. This institution represents the world's leading example of a government-backed cryptocurrency exchange. Supervision of this new project is entrusted to my father!
With so much positive development in Indonesia, we can call it a hot seat for cryptocurrencies in the coming years!
Conclusion
Having ranked 7th on the Global Cryptocurrency Adoption Index, we are optimistic that Indonesia will move forward from here when it comes to cryptocurrencies! The future has a lot in store for those who want to explore the place for cryptocurrency related activities.
