Indonesia plans to set up a crypto exchange this year before transferring regulatory powers from the commodity futures trading supervisory body, Bappebti, to the financial services authority known as OJK, Bloomberg reported on Wednesday.
In December 2022, Indonesia’s parliament approved an omnibus bill aimed at strengthening and preparing the financial industry. As part of the financial sector reforms, OJK will assume regulatory power over digital assets over the next two years, by which time the exchange should be set up, said Bappebti acting head Didid Noordiatmoko.
Under the new law, OJK will create a new position — the chief executive of supervision of financial sector technology innovation, digital financial assets, and crypto assets.
Bappebti had expressed its intention to establish a crypto exchange way back in 2021, but the plan encountered a number of obstacles, Noordiatmoko said during a virtual session on Wednesday. He said the regulator is not able to find an ideal benchmarking from other countries that already have good crypto exchanges.
The delay in launching is also hurting Bappebti because there is no division of responsibility and risk related to crypto asset transactions in Indonesia currently. Therefore, the regulator aims to establish the exchange as soon as possible.
Cryptocurrency is still a favoured instrument among Indonesian retail investors. In spite of the global downturn in crypto assets last year, crypto investors in the country reached 12.27 million as of September 2022, up over 81% from the same period in 2021. However, in line with the drop in global crypto value, crypto transactions in Indonesia fell 70% to 226 trillion rupiah in September 2022 from 859.4 trillion rupiah last September.
There are currently 25 crypto trading platforms registered with Bappebti, including Binance-backed Tokocrypto, Hedosophia-backed Pintu, and Luno Indonesia. Bappebti allows 383 crypto assets and 10 local coins that can be traded in the country, while another 151 assets and 10 coins are under review by the regulator.
Besides shifting the regulatory power of crypto assets, the new omnibus law for the financial sector has given a green signal or the upcoming central bank digital currency (CBDC) – Rupiah Digital – to have the same function as rupiah fiat money.
In November, the Central Bank of Indonesia released a white paper on Rupiah Digital to map out the potential design and function of the digital currency.