Indonesia mulls introducing a digital asset exchange

• Indonesia is forging ahead with earlier plans of establishing a cryptocurrency exchange.
• The government plans to launch this before the end of the year, citing rising interest in digital assets.

The Indonesian government is considering launching its first digital assets exchange by the end of 2022 as it seeks to protect consumers and provide oversight in the crypto market.

Citing a Wednesday report by DealStreatAsia, the plan was arrived at after considering the rising number of Indonesians pivoting towards virtual currencies. While the launch of the exchange had initially been scheduled for 2021, it was later postponed to 2022 owing to the complexity of the process.

Jerry Sambuaga, the country’s deputy trade minister, however, confirmed that most of the hard work had been completed, suggesting that the bourse would be launched soon after they are done hammering out some minor issues. According to the official, they were conducting final preparations to ensure that entities listed in the bourse would be competent.

Before assets are listed on any exchange, Indonesia’s Commodity Futures Trading Regulatory Agency  “Bappebti” must validate the applying entity against existing procedural requirements including whether they have met the minimum equity threshold to offer themselves as investment vehicles. He also stated that they did not expect any further delays to the launch.

“We will make sure that every requirement, procedure and the necessary steps have been taken,” Jerry said on the sidelines of NXC international summit 2022 Wednesday. “This is proof that we are being careful. we don’t want to be hasty as it may cause us to miss something.”

The launch of the bourse is expected to attract more crypto firms and exchanges into Indonesia, key among them, the 25 crypto exchanges that have already been granted operating licences by Bappebti.

“The industry will grow. We will start seeing more local projects,”  Pang Xue Kai, CEO of Tokocrypto, one of the exchanges that have been granted an operating license said at the same event. According to him, the bourse could become a catalyst for the entire Indonesian crypto community, leading to more participants in turn attracting more institutional investors.

The latest report comes after Bappebti halted the issuance of new licenses for prospective crypto firms in mid-August stating that it wanted  to provide “transparent, efficient, and effective trading activities of crypto assets with fair competition to protect the interests of all parties in the crypto trading market.” Whereas it remains unclear if that decision was permanent, it could well be tied to the authentication process of entities before the bourse is launched

Although Indonesia is yet to have stand-alone regulation on digital assets, the south-east Asian nation continues to offer warm reception for crypto-assets. According to a recent report by Bappebti, crypto transactions topped at 859.4 trillion rupiahs (roughly $57.6 billion) in 2021 after a 1,224% increase from 64.9 trillion in 2020. Furthermore, the number of crypto users jumped to 15.1 million as of June 2022, up from about 7.7 million in the same period last year.