According to the nation’s cryptocurrency regulator, Indonesia has seen an amazing increase in cryptocurrency transactions, with a total of IDR 30 trillion ($1.92 billion) in February. The Commodity Futures Trading Supervisory Agency (Bappebti) reported that the number of registered crypto investors in the country also experienced substantial growth, reaching 19 million last month, with an increase of 170,000 users compared to January. The notable increase in cryptocurrency transactions can be ascribed to optimistic market sentiments stoked by the price surge of Bitcoin (BTC) and the rally of altcoins, or tokens that are not Bitcoin.
Indonesia to Surpass Transaction Volume Recorded in 2021
According to the regulator, Indonesia may equal or even exceed the $51.28 billion in transactions made during the 2021 bull run. Representative Tirta Karma Senjaya of Bappebti stated that, given the negative trend seen in 2022 and 2023, a recovery is expected in 2024. This predicted recovery is thought to be significantly accelerated by the impending halving of Bitcoin. Bappebti thinks that lowering or doing away with cryptocurrency taxes would be a wise move in order to meet the goal of more cryptocurrency transactions. Presently, exchanges pay a 0.02% tax per transaction for the crypto bourse, depository, and clearing house, while users are subject to a 0.10% income tax and a 0.11% value added tax (VAT). At a recent Reku exchange event, Tirta stated, “I have previously said that this industry (crypto) is still in its embryonic stage, so imposing heavy taxes might kill the industry.” Significant changes are also anticipated upon the transfer of crypto oversight to the Financial Services Authority (OJK) in January 2025. This shift might entail changing VAT laws and classifying cryptocurrencies as securities, which could influence Indonesia’s cryptocurrency regulations.
Indonesia Issues New Crypto Regulations
The Financial Services Authority (OJK), Indonesia’s financial services watchdog, released new rules last week that will take effect in January 2025. These rules will give banks, insurance providers, and other financial industry players direction on how to take advantage of new technologies and pursue creative opportunities. The recently enacted regulations recognize how technology has affected a range of financial services and products as well as how businesses operate digitally. The regulations establish the framework for overseeing developments in the cryptocurrency space within the finance industry, even though they do not go into particulars. The OJK is working closely with Bank Indonesia, the central bank of Indonesia, and Bappebti, the current crypto regulator, to ensure a smooth transition. To oversee the change in oversight of digital financial assets, they are assembling a transition team. To create a thorough crypto policy, the OJK has been working with foreign partners in addition to its own domestic initiatives. The organization has collaborated with financial regulators in Dubai, Singapore, and Malaysia to create a strong framework for regulating cryptocurrencies. Additionally, it has written Memorandums of Understanding with the Virtual Asset Regulatory Authority in Dubai, Singapore’s Monetary Authority, and Malaysia’s Bank Negara.