Indonesia has introduced a national crypto asset exchange and clearing house to foster transparency and security for digital asset investors in the region.
The bourse, which has been operational since July 17, 2023, will list existing licensed crypto companies such as Binance’s Tokocrypto and Indodax as traders.
Indonesia fostering crypto adoption
When nations like Kuwait are imposing blanket bans on crypto, the Indonesian government has introduced a new national crypto exchange to enhance transparency and foster investor protection.
Operated by PT Bursa Komoditi Nusantara (BKNI), a subsidiary of the Indonesian Commodity Futures Trading Regulatory Agency (Bappebti), the platform will offer a variety of cryptocurrencies such as Bitcoin, Ethereum, and Tether.
This initiative aims to provide Indonesian investors with a trusted platform to engage in crypto transactions.
The platform will also be linked to a clearinghouse operated by PT Kliring Berjangka Indonesia (KBI), which will help to ensure that transactions are settled correctly and that all parties involved receive their funds.
The clearinghouse responsible for the new crypto platform will utilize various risk management tools to ensure that transactions are settled correctly and securely.
The introduction of this new crypto platform marks a substantial milestone for the Indonesian crypto industry, which has experienced significant growth in popularity recently. While the government has been cautious in regulating the industry, the launch of this platform demonstrates a proactive approach.
Sources say that demand for crypto assets in Indonesia has declined in recent months due to soaring interest rates globally.
Crypto transactions in the country between Jan. and June experienced a significant decrease of 68.7% compared to the previous year’s period.
Notably, the tether (USDT) stablecoin, Bitcoin, Ethereum, XRP, and BNB were the most actively traded crypto assets during this period, as reported by Bappebti.
From regulatory uncertainty to significant growth
Indonesia has banned using cryptocurrencies as payment, but it allows investment in digital assets.
Despite the ban, investment in cryptocurrencies has boomed in Indonesia, with an estimated 17.54 million people in the country investing in cryptocurrencies as of June 2023.
The government has displayed hesitation in regulating the industry, fearing risks of fraud and financial crime, but cited regulation No.8 of 2021, stating that any crypto assets that are traded in the country must obtain a business license under Commodity Futures Trading Regulatory Agency (BAPPEBTI).
Despite these uncertainties, the surging popularity of cryptocurrencies suggests that they have firmly established their presence in Indonesia’s financial landscape. It signifies that the crypto phenomenon is here to stay, gradually reshaping the country’s financial industry while laying the foundation for a new era of digital finance.
Elsewhere, the recently proposed “Crypto Assets National Security Enhancement Act of 2023” bill, aimed at regulating decentralized finance (DeFi) activity in the United States, is being rejected by key blockchain advocacy groups, including CoinCenter and the Blockchain Association.
These organizations have criticized the bill, deeming it unconstitutional, harmful to free expression, and incompatible with the workings web3. Concerns over its broad scope and impractical implementation have raised doubts regarding its viability and potential negative consequences.
Although the Act is currently under consideration and its fate as the law remains uncertain. Nonetheless, it signifies a proactive approach by the US government in regulating the crypto industry.