The Commodity Futures Trading Regulatory Agency (BAPPEBTI) of Indonesia has established a state-backed crypto-asset exchange, clearing house, and depository manager. This was announced in July 2023, and was long awaited, after several delays since 2021. PT Bursa Komoditi Nusantara was approved as the crypto-asset exchange, PT Kliring Berjangka Indonesia as the crypto-asset clearing house, and PT Tennet Depository Indonesia as the crypto-asset depository manager.
The Head of BAPPEBTI, Didid Noordiatmoko, emphasised that this initiative is proof that the Indonesian government is making efforts to create a fair crypto-asset trading ecosystem to guarantee legal certainty and prioritise protection for customers and the public. Indeed, the state-backed crypto-asset exchange – which is a world’s first – along with the critical settlement facilitators, will help ensure that crypto-asset transactions are carried out in an orderly and transparent manner in Indonesia.
The onboarding of crypto-asset physical traders onto the exchange and clearing house means that crypto-asset transactions and records of crypto-asset ownership and transactions can be centralised, enabling easier supervision of the crypto-asset market. Crypto-asset transactions will also be guaranteed by the clearing house. Meanwhile, crypto-asset depository managers are expected to play an important role in securing customers’ crypto-assets, as BAPPEBTI Regulation No. 8/2021 mandates the storing of at least 70% of customers’ crypto-assets in offline or cold wallets, which may be done through a crypto-asset depository manager.
This milestone builds on the growth of the crypto-asset market in Indonesia – in 2020, there was an estimated 1.5 million crypto-asset physical traders in 2020, which has grown to 17.54 million as of June 2023, far surpassing the number of capital market investors at 11.23 million. The establishment of the crypto-asset exchange, clearing house, and depository manager also provides greater certainty on the government’s commitment to maintain a robust crypto-asset market, amidst the ongoing transition of crypto-asset regulation from BAPPEBTI to the Financial Service Authority (OJK) as per the Financial Sector Omnibus Law.
With the approval of the crypto-asset exchange and clearing house, the current prospective crypto-asset physical traders (such as Indodax and Tokocrypto, which were allowed to carry out crypto-asset trading during the absence of the crypto-asset exchange and clearing house) are expected to undergo a second round of registration to be approved as crypto-asset physical traders under BAPPEBTI.
Access Partnership and the Fair Tech Institute are tracking digital economy, financial technology (FinTech), and digital payments developments closely. If you would like to have a briefing and learn more information on these issues, please contact Royston Wah at [email protected] or Kar Joon Fan at [email protected].