Indonesia Proposes New Crypto Regulator Amid Market Volatility

• The amendment was recommended by Finance Minister Sri Mulyani Indrawati.
• The minister brought up the recent volatility in the cryptocurrency market at the meeting.

It has been announced by the Indonesian government that it plans to give the Financial Services Authority (OJK) responsibility for regulating, supervising, and overseeing the country’s expanding cryptocurrency investment market. Currently, market regulation is under the purview of the Ministry of Trade and the Commodity Futures Trading Regulatory Agency.

As reported, the amendment was recommended by Finance Minister Sri Mulyani Indrawati. And is part of pending legislation regarding the banking industry. It was reported in September that the biggest economy in Southeast Asia was planning to strengthen the regulation of cryptocurrency exchanges, prompting lawmakers to submit the government with the proposed legislation.

Stringent Approach After High Volatility

Although buying or selling cryptocurrency in Indonesia is prohibited, investing in commodities is lawful. More than 15 million people in the nation had invested in cryptocurrencies as of June, says Sri Mulyani. This is up from only 4 million just two years earlier. In 2020, there were 9.1 million people who invested in the stock market. 

The minister brought up the recent volatility in the cryptocurrency market at the meeting. And called to hear the executive branch’s first reaction and suggestions for amendments to the legislative plan. Once the government and the legislature have reached an agreement on all of the bill’s terms. It will be signed into law.

The Indonesian government has proposed expanding Bank of Indonesia’s mandate to include the promotion of economic development in addition to the maintenance of price stability. Sri Mulyani has voiced her approval of the plan but has also called for the central bank and other financial authorities to be allowed to retain their autonomy.

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