Indonesia Plans to Launch a National Cryptocurrency Exchange in 2023
A major shift in Indonesia’s crypto industry: Will launch a national cryptocurrency exchange in 2023
2023 will see key reforms in Indonesia’s crypto industry: Indonesia plans to launch a national cryptocurrency exchange in 2023 before it shifts regulatory powers over such assets to the Financial Services Authority, from a commodities agency, according to a report from Bloomberg. Crypto assets in Indonesia are currently traded alongside Bappebti, a commodities-focused agency, which has jurisdictional power over the cryptocurrency space in Indonesia. As part of a broader financial sector reform, the FSA will assume regulatory power over the assets over the next two years, by which time the exchange should be set up, said Bappebti acting head Didid Noordiatmoko on Wednesday. With the reform, Indonesia aims to embrace cryptocurrency and provide related services for citizens of the country.
Didid Noordiatmoko, the acting head of Bappebti, stated that the FSA will assume regulatory power over crypto assets from the commodities agency over the next two years. During this time, Indonesia will set up a crypto exchange.
An official from Indonesia’s Ministry of Finance reported that the shift of regulatory power from commodities to securities agencies was warranted due to the status of crypto assets as investment vehicles. He added:
“In fact crypto assets have become investment and financial instruments, so they need to be regulated on an equal basis with other financial and investment instruments.”
There were 16 million cryptocurrency investors in Indonesia in the first eleven months of 2022, an increase from 11.2 million at the end of 2021. However, last year, the trading value dropped to around 300 trillion rupiah ($19.2 billion) from 859 trillion rupiah ($54.9 billion) a year earlier.
Countries such as Morocco, Nigeria, and Israel are working to introduce crypto regulations in 2023. Attention will be paid to the regulatory frameworks of countries like the United States and the United Kingdom. In the U.S. the cryptocurrency community is on the watch out for the rectification of the Lummis-Gillibrand crypto bill this year.
The crypto industry of Indonesia The shift in regulatory authorities will affect the 383 crypto assets and 10 local coins currently available in Indonesia. Bappebti is currently reviewing another 151 assets and 10 local coins. The country has 16 million crypto investors, with more rushing in despite an industry-wide downturn.
The crypto winter had an impact on the country’s crypto trading volume. Between January 2022 and November 2022, the trading value went from 859 trillion rupiah to 300 trillion rupiah, a 66% decline.
In December 2022, Perry Warjiyo, the Governor of Indonesia’s central bank, unveiled plans to launch a CBDC dubbed the “Digital Rupiah.” The CBDC will reportedly be used for various digital economic and financial transactions.
A digital token must be based on distributed ledger technology in order to be traded in Indonesia. The ABI and Bappebti conduct an evaluation known as the ‘analytical hierarchy process’ (AHP) on each local token issuer seeking a spot on the whitelist.
Before Bappebti reviews the asset, the ABI evaluates its market capitalization, the exchanges on which it is listed, as well as the economic advantages and risks related to the token. The ABI then assigns the asset a score.
Due to a lack of personnel, particularly those knowledgeable about the technical aspects of the cryptocurrency industry, Indonesia’s regulators are turning to the ABI for help.
Other strategies are also used by local regulators to increase user safety and transparency in the sector. The regulator recently established a helpline called ‘Lini Bappebti’ to address complaints and assist with general inquiries about crypto assets. Additionally, Bappebti has increased oversight and monitoring of cryptocurrency traders and exchanges.