Indonesia Authorities Need To Dig Deeper Into Blockchain

Various platforms in Indonesia are leveraging blockchain technology to enhance their operations according to a report compiled by Asosiasi Blockchain Indonesia, Coinvestasi, and Asosiasi Perdagangan Aset Kripto Indonesia. Developments in the regulatory environment in countries like the US, the EU, and other Southeast Asian countries among others, are being observed closely. Several nations do not favor cryptocurrencies given the financial risk involved in these assets.

Java Has The Highest Number of Investors in Indonesia

“According to data from the Commodity Futures Trading Regulatory Agency (Bappebti/CoFTRA), the total number of crypto investors in Indonesia reached 18.25 Million as of November 2023,” the report dubbed ‘Indonesia Crypto and Web3 Industry’ reads. “The average monthly increase in the number of registered customers is 437,900 customers. Java is the region with the highest number of crypto investors, at 63.6%.”

As of now, cryptocurrencies are legal in Indonesia and can be traded as securities. However, it is believed there that with the transfer of authority from Bappebti to Indonesia’s Financial Service Authority or Otoritas Jasa Keuangan (OJK), they are likely to be treated as securities.

Crypto trading volume maintained a healthy flow in the country despite the bear market. Digital assets worth Rp 122 Trillion (Nearly $8 Billion) were traded throughout the year. Trading volume reached Rp 17 Trillion (just over a Billion dollars) in November 2023. It started falling initially during the year but again got traction after May.

The Web3 sector is making strides in the country too. As per the report, “Indonesia’s regulatory framework for Web3 and Crypto is still evolving, but the government has taken a proactive stance toward the market. Web3, often associated with blockchain, crypto assets, decentralized finance (DeFi), and non-fungible tokens (NFTs), is currently under observation and study by Indonesian regulators, with comprehensive regulations in a state of flux.”

Authorities in the southeastern nation have shown interest in exploring the blockchain sector to understand its potential in a variety of sectors including finance, supply chain, and governance. Still, they need to understand more deeply about the technology to make any further moves. “Given the dynamic and evolving nature of Web3 technologies, regulatory bodies are diligently working to understand the associated risks and benefits before formulating comprehensive guidelines,” the report said.

In contrast to the bull market of 2021, the activity declined by 85 percent when the volume reached Rp 860 Trillion (Nearly $55 Billion). Like most of the nations, Bitcoin (BTC) remains the preferred currency to trade in the region. As of now, BTC was trading at a market price of $42,748.

Data aggregator Statista’s crypto adoption index placed Indonesia at number 20 out of 146 nations in 2022 where “retail service value for both centralized and decentralized finance (DeFi) value.” Moreover, high penetration rate in smartphone and internet is pushing crypto activities through a mobile-heavy user base.

Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.