Indonesia’s Ministry of Trade is planning to issue a new rule governing crypto asset exchanges. To ensure more local control, the Indonesian government intends to implement new rules that require two-thirds of any board of directors and commissioners to be Indonesian citizens, as well as to be residents of the country, according to Reuters.
According to reports, the ministry’s Commodity Futures Trading Regulatory Agency (Bappebti) will issue the new legislation soon. Bappebti Acting Head Didid Noordiatmoko told the Indonesian parliament in a hearing that ensuring two-thirds of the board were Indonesians based in the country “could prevent the top management running away when a problem hits the exchange.”
With regards to the guidelines, Deputy Trade Minister Jerry Sambuaga said: “We don’t want to give permits (to exchanges) carelessly, so only for those that meet the requirements and are credible.”
The new rules will also require exchanges to use a third party for storing client funds, and prohibit the firms from re-investing any such stored crypto assets, according to a document issued by the ministry.
Indonesia’s Decision Triggered by Financial Issues in Southeast Asia
Recently, other Southeast Asian countries have been tightening regulations around crypto. Thailand’s Securities and Exchange Commission recently banned crypto operators from providing or supporting deposit and lending services; filed an official police complaint against Zipmex, one of Asia Pacific’s most prominent digital asset exchange platforms (operating in Singapore, Thailand, Indonesia, and Australia) for non-compliance; and fined Bitkub 8.53 million baht for insider trading.
The Monetary Authority of Singapore (MAS) has issued strong warnings to retail investors, advising them to avoid cryptocurrencies, while taking increasingly strict measures to restrict retail access to cryptocurrencies.
It is noteworthy that Indonesia made it into the top 20 countries of the 2022 Global Crypto Adoption Index, published by Chainalysis, along with other prominent Asian countries and emerging markets. Furthermore, according to a study by crypto exchange Gemini, crypto asset ownership in Indonesia was among the highest globally, with many investors in the country viewing digital assets as protection against future inflation.
According to Bappebti’s data, cryptocurrency has only gained in popularity in Southeast Asia’s largest economy, with the total transaction volume of crypto assets in the country rising more than 1,000% in 2021, at 859.4 trillion Rupiah (or approximately $57.37 billion USD).
On the Flipside
- The government of Indonesia has plans to set up a digital assets exchange called “crypto bourse.” The country aims to establish the homegrown exchange before the end of 2022.
Why You Should Care
The Indonesian government has been looking to regulate digital currencies and introduce a central bank digital currency (CBDC) as a means of curbing the growing adoption of cryptocurrencies in the region. The measures being taken stand to affect a large percentage of the local population involved in crypto asset trading.
Read about Indonesia’s tech progress and how it will affect the country’s crypto scene:
The Indonesian Tech Tiger is Coming and Tokenized Crowdfunding Can Feed It
Find out about the measures being taken by other Southeast Asian countries to tighten their grip on crypto:
Thailand’s SEC Bans Crypto Lending Services