Cryptocurrencies are the next big thing in Indonesia. According to the Department of Commerce, transactions for currencies like Bitcoin (BTC) has grown more than 14 times from a total of Rs 60 trillion ($4.1 billion) in 2020 to a total of Rs 859 trillion ($59.83 billion) in 2021.
It is getting to the point where cryptocurrencies are becoming more popular than traditional securities. Deputy Minister of Commerce Jerry Sambuaga stated that more than 11 million Indonesians bought or sold cryptocurrencies by 2021. Meanwhile, according to the Indonesia Central Securities Depository Center, the total number of portfolio investors. – expressed by the number of unique investor identities – reached 7.35 million. in 2021.
Even so, the 11 million crypto investors still represent only about 4% of Indonesia’s total population, meaning there’s still plenty of room for growth. The growth of the crypto community in Indonesia goes hand in hand with a number of supporting local phenomena, including but not limited to:
- Legal support from government agencies
- Increased ease of access to cryptocurrency trading
- Acceptance from local big tech players
Regulators aim to make things safer
Although crypto-assets are still not allowed as a payment instrument, companies are still welcome to buy and sell cryptocurrencies like commodity exchanges in Indonesia. Since 2019, cryptocurrency trading in Indonesia has been officially supervised and regulated by Commodity Futures Trading Authority (BAPPETI), an agency under the Ministry of Commerce.
This regulatory body is, among other things, responsible for inspecting, filing and approving companies and items that are allowed to do business in Indonesia. As of 2021, its whitelist Among the allowed crypto tokens reached 229 items, including popular assets like Bitcoin, Ether (ETH), Polkadot (DOT) and Cardano (ADA).
These entries are authorized based on BAPPEBTI’s own testing methods, security and market capitalization ratings, background checks on development teams, blockchain system management, and development roadmaps. with verifiable success metrics.
In an official statement, the regulator repeated its primary goal of providing legal security and protecting the interests of Indonesian crypto consumers. BAPPEBTI stated:
“With the new rules we published, it is hoped that we and crypto exchanges in Indonesia can work together to help ensure that every crypto transaction is properly regulated. legal and safe for investors in Indonesia.”
Another regulator, the Financial Services Authority, has specifically banned financial services companies, such as lending or credit services, from marketing or facilitating cryptocurrency transactions, reiterates BAPPEBTI’s regulation that all cryptocurrency exchanges must be specifically registered with them.
The aforementioned boom in the number of both crypto and equity investors in Indonesia goes hand in hand with the growing popularity of fintech applications, such as Bareksa and Ajaib, which means a large share of investors This new investment can be the newcomer. Tokocrypto, a popular local cryptocurrency exchange, has announced its intention to work with the government to make trading safer by helping educate investors about the risks of cryptocurrency trading. and how to avoid legally dubious exchanges and assets.
Companies that plan to promote cryptocurrency adoption in Indonesia need to build a positive and proactive working relationship with the government and ensure compliance with all government regulations in order to gain their trust. of local consumers.
17 registered crypto exchanges in Indonesia
As of March 2022, there were 17 companies registered and authorized by BAPPEPTI to exchange cryptocurrency in Indonesia, with their user base growing rapidly. A market leader, Indodax reports reaching 5 million members by 2022, up 104% from 2021. Another prominent exchange, Tokocrypto, reported reaching 2 million members by the end of 2021. , an eightfold increase from 2020.
As mentioned above, a big contributing factor to the success of these platforms is their strategy of prioritizing mobile devices, with easily accessible apps. With Indonesia’s internet penetration rate at 73.7% in 2021, it’s no surprise there is more traction from the country’s heavy mobile user base.
Indonesia’s crypto community is also growing to be more than just exchanges. The Indonesian Blockchain Association, a local association and advocacy group for blockchain and cryptocurrency, has 28 member companies and organizations as of 2022. The association includes not only exchanges but also public companies. startups and technology companies that use blockchain in their crypto-specialized communication platforms and ecosystems.
Steven Suhadi, co-founder of the Indonesian Cryptocurrency Network and founding member of the Indonesian Blockchain Association, told Cointelegraph, “Regulators in Indonesia over the past 10 years have become more adaptive to the changes in the public sector. technology, from e-commerce to ride-hailing and most recently, P2P [peer-to-peer] loan. Indonesia already has well-defined rules for cryptocurrency exchanges and trading. Over the past 24 months, regulators have taken more proactive steps towards digital assets, which will help increase Bitcoin and crypto in Indonesia. “
More supply means more demand, and with more players entering the country, cryptocurrencies are set to boost the popularity of cryptocurrencies.
Local tech leaders welcome crypto with open arms
In December 2021, cryptocurrency exchange Binance announced a joint venture with a consortium led by MDI Ventures to develop a new digital asset exchange in Indonesia.
MDI is the $830 million venture capital arm of Indonesia’s largest telecommunications company, Telkom Indonesia. Investment portfolio of MDI boasts several companies that have become big names in Indonesia, including fintech leaders Kredivo and KoinWorks.
Binance founder and CEO, Changpeng Zhao, has expressed his confidence and goals for cryptocurrencies in Indonesia, saying, “With the rapid adoption of technology and strong economic potential, , Indonesia can become one of the leading centers of blockchain and cryptocurrency ecosystems in Southeast Asia.”
This opinion was echoed by MDI CEO Donald Wihardja, who stated: “Cryptocurrencies, crypto-assets and underlying technology, blockchain, represent an undeniably important part. receipt of other financial and digital infrastructure in the future.”
It will be worth keeping an eye on this partnership in the future, but for now, it can be seen as a sign that cryptocurrency is no longer a niche market in Indonesia. More mainstream players have already started participating in it, which means more resources and incentives to increase adoption.
What’s next for Indonesia?
Given the increasing trend in trading volume and the number of traders and exchanges in recent years, we can assume that cryptocurrencies and blockchain will only get bigger in 2022 and beyond. again. Nonfungible tokens (NFT) recently made headlines in Indonesia after news broke about Ghozali, a computer science student who made over $1 million from selling NFT selfies on OpenSea. . With Indonesia’s burgeoning crypto community and already vibrant arts scene, NFT could be the latest chapter in Indonesia’s crypto journey – in a way, it will become a major market. emerging markets need attention.
Report by Diaz Praditya.
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