Indonesia to launch a cryptocurrency exchange

Indonesia is aiming to establish a cryptocurrency exchange as part of its regulatory reform for cryptocurrencies, according to sources. The exchange is expected to launch in 2023 and should be live and operating before the commodities authority hands over control of regulation to the securities authority.

A cryptocurrency exchange in Indonesia should be established this year, according to Didid Noordiatmoko, chairman of the Indonesian agency that regulates commodity futures trading (Bappebti). Noordiatmoko made a statement early in January that points out the investment opportunities that cryptocurrencies present to users and citizens in the country. This action is a component of bigger financial reform that was started in December 2022. According to a proposal, the Financial Services Authority will undertake cryptocurrency regulation. This authority will be taken from Bappebti, an organisation that focuses on commodities, and the change is expected to occur over the course of the next two years.

The Financial Sector Development and Reinforcement law, which will serve as the main legislative framework for the financial services industry, was approved by the Indonesian House of Representatives oin the middle of December 2022. Suminto Sastrosuwito, the director of financing and risk management at the national finance ministry, provided the following justification for the authority transfer from Bappebti to the FSA, which was made official by the bill:

“[Crypto assets] have become investment and financial instruments, so they need to be regulated on an equal basis with other financial and investment instruments.”

This comes following a complete prohibition that Indonesia placed on cryptocurrency payments in 2017. The nation has been allowed to trade in the industry, but payments in cryptocurrency and digital currencies were outlawed. Noordiatmoko announced that the the value of cryptocurrency transactions in the nation decreased by half in 2022, from 859.4 trillion Indonesian rupiahs to 296.66 trillion.

The exchange and regulatory reform also comes into practice hand-in-hand with the potential for a digital rupiah, an Indonesian Central Bank Digital Currency (CBDC). The concept will be explored and has been opened for public commentary since December last year.