Indonesia is making progress in its plans to establish a national cryptocurrency exchange, which is set to become the sole platform for crypto transactions in the country. The Commodity Futures Trading Supervisory Agency (CoFTRA), also known as Bappebti, intends to launch this exchange in July 2023. The agency has finalized discussions on stock exchange regulations, including Know Your Customer (KYC) processes.
CoFTRA has already conducted successful system integration tests between traders, exchanges, clearing, and depository services. The exchange will operate through an integrated application.
Yesterday we conducted system integration tests between traders, exchanges, clearing, and depository
Didid Noordiatmoko, Bappebti head.
The national exchange will have certain restrictions, allowing only local transactions while aligning with international market developments. The prices of cryptocurrencies traded on the exchange will be subject to approval by Bappebti. The Trade Minister, Zulkifli Hasan, has been informed of these developments, and unless instructed otherwise, Bappebti will proceed to grant the necessary permit. Licensed traders will then have one month to join the exchange.
The journey towards a national cryptocurrency exchange in Indonesia began in 2021 when a state-backed telecom firm partnered with Binance for this venture. Binance later increased its stake in the Indonesian crypto asset trader Tokocrypto. The Ministry of Trade is currently reviewing companies to determine their eligibility for participation in the exchange. While there are five active crypto exchanges registered in the country, the ministry’s exchange aims to include them all, acting as a clearing house and custodian within the local crypto market.
At present, crypto assets in Indonesia are traded alongside commodity contracts under the regulation of Bappebti. However, the regulatory authority will shift to the Financial Services Authority (OJK) with the establishment of the national exchange. This shift in power follows amendments made to crypto regulations on December 15, recognizing digital assets as regulated financial securities. Indonesia is also planning to launch a central bank digital currency as the only legal digital tender, although cryptocurrency payments are currently prohibited. Despite this restriction, the number of cryptocurrency investors in the country has risen significantly, reaching over 15 million in June of the previous year.
The introduction of a national crypto exchange in Indonesia is expected to have a significant impact on the country’s crypto landscape. By centralizing cryptocurrency transactions through a single platform, it will streamline regulatory oversight and enhance investor protection. The exchange will enforce strict KYC processes, promoting transparency and combating illicit activities. Furthermore, the integration of multiple exchanges into a single entity will simplify trading operations, ensuring efficient clearing and asset custody. As the exchange aligns with international market developments, it will contribute to Indonesia’s integration into the global cryptocurrency ecosystem, fostering growth and innovation in the sector.