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Indonesia has announced plans to launch a national crypto exchange in 2023.
According to a Bloomberg report, regulatory oversight of crypto activities will also shift from the country's Commodity Futures Trading Regulatory Agency, known as Bappebti, to the Financial Services Authority (FSA) for the next two years, during which the exchange will likely be established.
Explaining the change in policy, Suminto Sastrosuwito, director general of financing and risk management at Indonesia's Ministry of Finance, said that crypto assets are financial investment assets, and hence should be regulated by the FSA.
“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," he said.
Indonesia recognised crypto as a commodity and formalised trading of the asset class in 2018, including via centralised exchanges. As of September 2022, there are 25 companies registered and permitted by Bappebti to carry out exchange services in Indonesia, while 229 crypto assets are legally sanctioned for trading by those companies.
However, in August last year, Bappebti issued a moratorium on new crypto exchange licenses, meaning that new crypto exchange registrations are paused. The agency also established a rule which will require two-thirds of crypto exchange board members and directors to be Indonesians residing within the country, in a bid to protect investors.
Despite unclear regulatory developments, Indonesia still possesses a thriving Web3 ecosystem.
According to Gemini’s recent Global State of Crypto report, Indonesia has the highest crypto ownership (41%) among adults earning more than US$14,000 annually. The Indonesian Ministry of Trade estimates that the country currently has 14 million crypto users, up from 6.6 million users in June 2021.
“With one of the fastest growing and largest economies in the world, poised to dominate, Indonesia has always been a key area of interest for founders and investors. Indonesia has consistently shown an ability to leapfrog technological progress in traditional fintech and technology, and we believe this will be the case with crypto and blockchain,” Chia Jeng Yang, investor at Pantera Capital, told Blockhead.
Last month, Indonesia's central bank, Bank Indonesia (BI), issued a white paper to explore central bank digital currency (CBDC) use cases.