Cryptocurrency is the next big thing in Indonesia. According to the Ministry of Trade, transactions in currencies such as Bitcoin (BTC) have grown more than 14 times from 60 trillion rupees (4.1 billion dollars) in 2020 to 859 trillion rupees (59.83 billion dollars) in 2021.
It has to do with the fact that cryptocurrency is becoming more popular than traditional stocks. Deputy Commerce Secretary Jerry Sambuaga said more than 11 million Indonesians bought or sold cryptocurrencies in 2021. By comparison, the total number of portfolio investors, according to the Indonesian Securities Depository, reached 7.35 million, as indicated by the number of individual investors. in 2021.
Despite this, the 11 million cryptocurrency investors still make up only around 4% of Indonesia’s total population, which means that there is still plenty of room for growth. The growth of the crypto community in Indonesia goes hand in hand with many supportive local phenomena including, but not limited to:
Regulatory support from public agencies
Increase easy access to cryptocurrency trading
Accreditation from leading local technology players
Regulators strive to make things safer
While cryptocurrencies are still not allowed as payment instruments, companies can buy and sell cryptocurrencies that reside in Indonesia. Since 2019, cryptocurrency trading in Indonesia has been under the official supervision and regulation of the Commodity Futures Trading Regulatory Agency (BAPPEBTI), a body under the Ministry of Commerce.
Among other things, this administrative body is responsible for examining, documenting and accrediting companies and goods that are allowed to trade in Indonesia. As of 2021, the whitelist of allowed crypto tokens has reached 229, including popular assets such as Bitcoin, Ether (ETH), Polkadot (DOT) and Cardano (ADA).
These elements are allowed based on BAPPEBTI’s proprietary validation methods based on market value rankings as well as security, background checks for development teams, management of blockchain systems and development roadmaps with verifiable success rates.
In an official statement, the board reiterated its primary goal of providing legal certainty and protecting the interests of Indonesian cryptocurrencies. male bobty:
“With the new rules we have published, we hope that we and crypto exchanges in Indonesia can work together to ensure that every crypto transaction is legally regulated and safe for investors in Indonesia.”
Another governing body, the Financial Services Authority, specifically banned companies providing financial services, such as lending or lending services, from marketing or facilitating cryptocurrency trading, and reaffirmed BAPPEBTI’s requirement that all cryptocurrency exchanges be specifically registered with them.
The aforementioned boom in the number of crypto and equity investors in Indonesia goes hand in hand with the growing popularity of fintech applications such as Bareksa and Ajaib, which means that a large percentage of these new investors may be new players. Tokocrypto, a leading 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 questionable exchanges and assets.
Companies planning to accelerate the introduction of cryptocurrencies in Indonesia must establish active and positive cooperation with the authorities and enforce all its regulations in order to gain the trust of local consumers.
17 crypto exchanges registered in Indonesia
As of March 2022, 17 registered companies were allowed to exchange cryptocurrencies in Indonesia by BAPPEBTI, and their user base grew rapidly. Market leader Indodax announced that it would reach 5 million members by 2022, an increase of 104% over 2021. Another well-known exchange, Tokocrypto, reported reaching 2 million members by the end of 2021, eight times what it was in 2020.
As mentioned earlier, an important success factor for these platforms is their mobile strategy with available apps. Given that Internet penetration in Indonesia reached 73.7% in 2021, it is not surprising that the user base in a country with a large number of mobile devices is more popular.
The Indonesian crypto-community goes beyond mere exchange. The Indonesian Blockchain Association, a local blockchain and cryptocurrency advocacy group, has 28 member companies and organizations as of 2022. The association includes not only exchanges but also startups, technology companies that use blockchain in their ecosystem and media platforms that specialize in digital currencies.