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Indonesia will tighten cryptocurrency regulation with stricter exchange rules

At a parliamentary session in Jakarta on Tuesday, representatives from Indonesia’s Ministry of Trade and the Commodity Futures Trading Regulatory Agency (Bappebti) said that the country is getting ready to release new regulations to tighten the regulation of cryptocurrency exchanges.

Two-thirds of cryptocurrency exchange directors must be Indonesian citizens who live in the nation, according to one of the new regulations.

The new regulation came after Southeast Asia-focused cryptocurrency exchange Zipmex had to cease withdrawals due to financial difficulties.

In order to store customer funds, cryptocurrency exchanges will also be obliged to engage a third party. They won’t be allowed to reinvest any hoarded cryptocurrency either.

He stated that Bappebti will announce the new guidelines soon without specifying a deadline.

Sambuaga added that the Indonesian government still intends to open a cryptocurrency asset exchange this year. The opening of the bourse has been postponed numerous times.

Although Indonesia permits the trading of cryptocurrencies as commodities, it does not accept them as payment methods.

The Indonesian Directorate General of Taxes said in April that it had set both income tax (PPh) and value-added tax (VAT) on cryptocurrency purchases at 0.1%.

According to Bappebti, cryptocurrency transactions in Indonesia surged by 1,224% from 64.9 trillion rupiahs in 2020 to 859.4 trillion rupiahs ($57.5 billion) in 2021. In Indonesia, 15.1 million cryptocurrency users transacted transactions worth 212 trillion rupiahs in the first half of this year.

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.