The frowned upon policy includes a minimum of IDR 1 trillion (US$71.17 million) as a paid-up capital for a new trader offering future contracts for crypto assets
Cryptocurrency has been traded in Indonesia for a while now, but just recently got regulated by Indonesia’s Commodity Futures Trading Regulatory Agency, known locally as Bappebti. It just authorised digital currencies as a trading commodity, setting an IDR 1 trillion (US$71.17 million) as the minimum paid-up capital for a new trader offering future contracts for crypto assets.
The authorisation is under regulation No.5/2019, as told by KrAsia. Since October last year, the capital of Indonesia Jakarta has gone ahead and allowed the trading to protect customers from crypto fluctuations.
The regulation focusses on technical provisions for the implementation of cryptocurrency exchanges, which effectively treats currencies like bitcoin as commodities to be traded legally.
“We want to give protection to people who want to invest in crypto assets so that they aren’t cheated by fraudulent sellers,” said Head of Bappepti, Indrasari Wisnu Wardhana.
Cryptocurrency exchanges have been around since 2014 amid the legality uncertainty, inflamed further by Indonesia’s Central Bank banning it as a payment option.
One of the requirements for trading cryptocurrency in the country is that the trader must pass a risk assessment that rules out that they’re being misused in money laundering schemes or the funding of terrorism. Other requirements include the client support division that the traders must possess, the employment of at least one certified security practitioner, five-years-old of transaction data, and have a server inside the country.
Despite addressing the issues in the country, this regulation has been frowned upon, especially in the country’s crypto community. Institute for Development of Economics and Finance (INDEF), for example, has an opinion that this regulation came “a bit too late”, as told by INDEF economist Bhima Yudhistira Adhinegara.
“Bitcoin prices in the last two years have fallen by 81% from US$ 18,269 at the end of 2017 to US$ 3,464 per coin in February 2019. The legal uncertainty surrounding bitcoin and other cryptocurrencies in Indonesia has caused many to miss out on opportunities during the trading heydays,” said Adhinegara regarding the late policy.
More complaints from the traders also highlight the new rules that requires a high minimum capital for traders. Trading is indeed allowed, but the payment option ban from the central bank is yet to be lifted.
“Regulation is needed to support a sector, help the economy and protect people “but it should not kill an industry,” Oscar Darmawan, Chief Executive of digital asset trader Indodax, or used to be known as bitcoin.co.id, said to Channel Asia Singapore.
Darmawan felt that the amount of minimum capital level is much higher than the IDR 2.5 billion minimum paid-up capital for a futures broker of other commodities.
Currently, it’s believed that there is no recorded data on the size of Indonesia’s crypto-currency market. However, people in the industry are positive that the number of investors has nearly matched that of the country’s main stock market.
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