Development of cryptocurrency on the global marketplace continues to ensue debates on its functionality, legality, and their economic implications. Wherein different ideas and opinions within the financial realm has sparked bipolarised discussions whether or not the usage and utility of cryptocurrency is genuinely the future for those seeking the ‘future of money’ through de-centralised financing. Essentially cutting out the so-called “middle man”. Commentators from the globe have given their insight – that this intangible asset will and now has challenged the existence of traditional financial institutions around the globe.
Within the legal world, governments are still scrabbling to establish the legality and regulation of crypto assets. It is only a matter of time until governments will debate as to which jurisdiction would oversee the entire world regulation of cryptocurrencies, similar to function of the current World Trade Organization. Whilst other countries such as the United States have legalized the entire usage of crypto assets as a form of payment, others such as Indonesia are still gradually developing a consensus to the regulating and governmental oversight of this relatively new asset in this region. Any activity in regards to cryptocurrency in Indonesia is still heavily regulated and over watched by Indonesia’s Commodity Futures Trading Regulatory Agency (Badan Pengawas Perdagangan Berjangka Komoditi – “BAPPEBTI”).
The Indonesian government has slowly but surely seen the colossal development of cryptocurrencies and Indonesian citizens are now continuing to grow in regards to their interests and desire to invest. To accommodate such, BAPPEBTI since 2019, has slowly introduced and enacted legislations and regulations to enable the proper regulating and oversight through clearer guidelines in enabling the surging demand of cryptocurrencies in Indonesia. From 2018, BAPPEBTI officialized its first umbrella ruilings starting from Ministry of Trade Regulation No.99 of 2018 concerning the General Policy on the Implementation of Crypto Asset Futures Trading (“MOT No.99/2018”) and BAPPEBTI Regulation No. 5 of 2019 concerning the Technical Provisions for the Implementation of the Physical Crypto Asset Market in the Future Exchange (“Regulation No.5/2019”) – to the now most recently enacted BAPPEBTI Regulation No. 7 of 2020 concerning Stipulation on List of Crypto Asset that May Be Traded in the Crypto Asset Physical Market (“Regulation No.7/2020”).
Current Update on Crypto Asset Laws in Indonesia
Since the umbrella ruilings in 2018 and 2019, BAPPEBTI has continued to enact further regulations to provide more clarification through BAPPEBTI Regulation No.9 of 2019 concerning Amendments to Regulation No.5/2019 (“Regulation No.5/2019”) and Regulation No.3/2020 concerning Amendments to Regulation No.5/2019 (“Regulation No.3/2020”).
However, what has been most notable concerns the most recent officialization of Regulation No.7/2020. This regulation has now shed considerable amount of light onto the previously unclear acknowledgment of which specific cryptocurrencies were allowed to be ‘legally traded’ and the criterions BAPPEBTI utilizes to establish their decisions.
Regulation No.7/2020 having been effective since 30 December 2020 now clearly stipulates definitive clarifications as to the specific guidelines and criterion required for crypto assets to be approved by BAPPEBTI and thus ultimately providing an official list of crypto assets. The approved list lists out 229 cryptocurrencies that are allowed to be traded within the territory of Indonesia. Previously, specific criterion and the list of crypto assets was not provided to the public. These developments and transparency from the government demonstrates the significant shift to being more open to allowing the trade of cryptocurrency within authorized and recognized trading platforms such as Indodax.
It must be known that the governmental standing still states that the utilization of cryptocurrencies as a payment mechanism is still prohibited and still views all cryptocurrencies (including any listed crypto assets) as a commodity in which a crypto asset cannot be used as a means of payment and any conversion into fiat must still be conducted through a crypto merchant such as Indodax.
According to Regulation No.5/2019 and reiterated again in Regulation No.7/2020, every crypto asset that is to be traded by a crypto merchant (e.g., Indodax) must be listed under BAPPEBTI’s list of crypto assets in order to be traded legally.
Recently there has been a large-scale taking down of 68 domain websites that have been trading crypto assets without the required license that has been stipulated within Regulation No.7/2020. This just goes to show the government’s determination to track-down and potentially regulate such a volatile market. However still, with the enactment of No.7/2020, clear stipulations of the technical guidelines to crypto asset approval and a clear list of approved crypto assets – demonstrates the flipside of the government in their attempt to be transparent.
Consideration
It is clear that the government are making significant decisions and positive reassertions to enable fair and translucent trading of cryptocurrencies. Whilst crypto assets within Indonesia is still considered relatively new, the development and governmental stance continues to evolve into a more developed and clarified mindset as demonstrated by the recent enactment of the transparent Regulation No.7/2020. It is only a matter of time until the government enacts further regulations related to crypto assets and we are continuing to closely monitor the legal climate and market reaction to regulations and laws concerning cryptocurrencies.
