Indonesia Proposes Mandatory Registration of Cryptocurrency Exchanges

Indonesia has proposed mandatory registration for cryptocurrency exchanges to enhance monitoring and ensure tax compliance. 

This move is part of a broader regulatory shift, with the government planning to transfer regulatory powers over crypto-assets from the Commodity Futures Trading Regulatory Agency (Bappebti) to the Financial Services Authority (OJK) by January 2025. 

The intention is to classify cryptocurrencies as securities rather than commodities. This regulatory change is significant, impacting the crypto industry’s development in the country. 

As part of the new regulations, Indonesian crypto exchanges are required to register with the national digital asset bourse. The government aims to use this centralized platform to make the crypto ecosystem safer and gather transaction data for tax purposes. 

The move towards increased oversight and registration has sparked protests from cryptocurrency traders, who express concerns about the potential impact on the market’s development.

As of June 17, 2023, Indonesia has been making significant strides in regulating its cryptocurrency market. According to The Ministry of Trade Regulation, cryptocurrency business regulations affirm that trading is legal in Indonesia. 

The Indonesian Commodity Futures Trading Supervisory Authority (BAPPEBTI) published Regulation No. 5 of 2019, providing guidelines for handling cryptocurrency in the market. However, it’s essential to note that using crypto as an official currency for transactions is not permitted at present.

Cryptocurrency Laws in Indonesia

Indonesia recognizes cryptocurrencies as trading assets or commodities, and the use of cryptocurrencies as money is prohibited. The approval of 229 crypto assets by BAPPEBTI allows them to be traded in the country. 

However, cryptocurrencies must adhere to risk assessment, anti-money laundering (AML), and countering the financing of terrorism (CFT) requirements. Bitcoin traders, in particular, are mandated to maintain transaction history for at least five years and host a server within the nation.

Foreign investors looking to establish a cryptocurrency business must become certified Crypto-Asset Physical Traders by fulfilling specific requirements, including a paid-up capital of at least IDR 50 billion, maintaining equity worth no less than IDR 40 billion, and obtaining PSE accreditation from the Ministry of Communication and IT.

All transactions must be conducted on a recognized exchange and reported to BAPPEBTI monthly.

In conclusion, Indonesia’s cryptocurrency landscape is evolving rapidly, focusing on creating a regulated and competitive market. As regulations continue to change, investors and businesses must stay updated.