Indonesia’s Commodity Futures Trading Supervisory Body (Bappebti) has officially launched the country’s first crypto exchange, PT Bursa Komoditi Nusantara, the regulator said on Thursday.
Bappebti also appointed PT Kliring Berjangka Indonesia as a futures clearing house for the guarantee and settlement of physical crypto assets, while PT Tennet Depository Indonesia has been appointed as a crypto asset storage manager.
Plans to establish the exchange began in 2021 but it encountered various obstacles that delayed its launch.
Head of Bappebti Didid Noordiatmoko said the formation of the exchange, clearing and crypto asset manager shows the government’s commitment in creating a safe and fair crypto asset trading ecosystem to guarantee legal certainty and protection of the community.
The launch of this crypto exchange was welcomed by industry players.
“This government-sponsored crypto exchange is a very interesting milestone in the history of the crypto industry since this is the first in the world. I think there will be many new developments or dynamics that will occur going forward. I hope that the Bursa Komoditi Nusantara will become a neutral central player, especially as a price maker,” Herdi Sularko, CEO of crypto exchange Vonix, told DealStreetAsia.
The new exchange is not a competitor to existing players, Sularko added. “I think the exchange will focus on collaboration rather than competition.”
Tokocrypto CEO Yudhono Rawis shared a similar sentiment. This development is an important step in strengthening Indonesia’s position as a centre for trade and innovation in crypto assets in Southeast Asia.
The comprehensive institutional ecosystem of the crypto asset industry can provide certainty, transparency, and protection for investors and industry players.
“As an industry player, we support and look forward to strategic directions regarding this institute where Tokocrypto will prioritise users’ security, even if there are changes or adjustments that must be made in the future,” said Rawis.
The new institutions are also expected to increase public trust in crypto assets, while business players can operate more safely and avoid harmful practices. “In the long term, this could create new opportunities for technological innovation, investment and sustainable economic development,” Rawis continued.
As part of the recently-established Law on Financial Sector Development and Strengthening [known locally as PPSK], Indonesia will move the regulation, supervision, and oversight of cryptocurrency investments from Bappebti to OJK.
The formation of a crypto exchange that is carried out during the regulatory transition aims to keep the crypto industry running and well-maintained. The crypto exchange is also expected to contribute to the economy through state revenues.
“Crypto trading carries a fairly high risk. By its nature, the value of crypto can be very volatile in the short term. For this reason, a good understanding in the community is needed, including the benefits, potential and risks of trading crypto assets,” said the head of Bappebti.
Retail investors in the country seem to still have good faith in digital assets. While trading volume in Indonesia has been significantly declining this year, the number of crypto investors is still increasing.
According to Bappebti, 10.77 trillion rupiah of crypto trading volume was recorded in April 2023, down 14.15% from the previous month. Nonetheless, there were 17.25 million crypto investors as of April this year, up by 25.64% from 13.73 million in the same month last year.
The bear market is expected to continue this year, but the market will get better next year, analysts believe.
“I think trading volume will continue to go sideways until the end of this year, but I expect a lot of price movement early next year due to Bitcoin halving in April 2024. The market will usually respond well after the halving,” said Sularko. Bitcoin halving happens every four years when the reward for Bitcoin mining is cut in half. This reduction can push the price of Bitcoin upward which signals the start of a bull market.