Indonesia Will Increase Regulation on Crypto Companies
27 Mar, 2024 ● Crypto News
The Indonesian Financial Services Authority (OJK) has mandated that local financial institutions planning to introduce new offerings, including those related to crypto assets, must participate in a regulatory sandbox.
This environment allows for the testing and experimentation of future innovations.
DetikFinance, a local Indonesian news outlet, reports that crypto assets, once regulated and overseen, will also be required to undergo this regulatory sandbox process.
This procedure implies that crypto enterprises in the sandbox phase are subject to evaluation by the regulatory body prior to receiving authorization to operate within Indonesia.
Regulatory sandboxes serve as platforms where companies can test innovative products or services temporarily.
Hasan Fawzi, who leads the country’s oversight of financial sector technology innovation, digital financial assets, and crypto assets, mentioned the inclusion of crypto assets in the regulatory sandbox as a measure to combat investment fraud.
Fawzi highlighted the OJK's commitment to consumer protection and education, stating, “I think this is our spirit at OJK, especially in consumer protection and education. We really hope that all of our regulatory mechanisms will be present and have a direct impact on preventing fraudulent investments.”
Starting in January 2025, the OJK will assume regulatory responsibilities for the crypto sector, which is presently managed by the country’s commodities authority, Bappebti.
Although crypto assets are currently classified as commodities in Indonesia, there is speculation that they might be reclassified as financial instruments under OJK's oversight.
The past year has seen significant activity in Indonesia's crypto environment, including the election of a vice president who supports cryptocurrency.
Gibran Rakabuming Raka, during his campaign, pledged to develop local expertise in blockchain, crypto, artificial intelligence (AI), and cybersecurity, aiming to empower the nation's youth in the digital domain.
In 2023, Indonesia inaugurated its national crypto exchange, the Indonesian Crypto Asset Futures Exchange, under local regulatory supervision.
This platform stands as the exclusive legal venue for trading digital assets in the country and has initiated blockchain pilots in public services.
Furthermore, in March, Indonesian officials were reportedly contemplating a revision of the country's dual crypto taxation system, advocating for a reevaluation of the existing 0.1% capital gains tax and 0.11% VAT on cryptocurrency transactions.
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