The Indonesian government is setting the stage for comprehensive regulation of the country’s booming cryptocurrency market. With over 18 million registered digital currency traders, surpassing the 12 million stock traders, Indonesia is taking steps to ensure that the rapidly expanding digital asset landscape operates within the bounds of national oversight.
The cornerstone of this regulatory initiative is the Commodity Future Exchange (CFX), the world’s first national bourse exclusively for digital assets, launched earlier this year. Indonesia aims to bring all exchanges under the purview of the CFX, aligning with traditional stock exchange models but tailored specifically for the digital realm.
Robby Bun, chairman of Aspakrindo, the country’s digital asset trade association, emphasized that the CFX serves a dual purpose. While enhancing the safety of the crypto ecosystem for investors is a stated goal, the government also plans to utilize the exchange for meticulous tracking of digital asset transactions, a crucial aspect for taxation purposes.
Since 2019, crypto exchanges operating in Indonesia have been subject to regulations stipulated by the Indonesian Commodity Futures Trading Supervisory Agency (Bappebti). The authorization process involves stringent checks, including registration with self-regulatory organizations like the CFX, followed by an assessment by Bappebti to determine a company’s eligibility to operate.
Prospective Crypto Players: Deadline Looms For Recognition
Prospective crypto exchanges face a crucial deadline of August 17, 2024, to complete registration. Failure to comply with the new procedures and deadlines will result in an automatic inability to operate in Indonesia. To continue operations, exchanges must secure a license (PFAK) by meeting all specified requirements.
Subani, chairman of CFX, affirmed that diligent reporting and monitoring of transactions within prospective exchanges are underway. The primary objective is facilitating a smooth transition from prospective exchanges to fully recognized entities.
The registration with the CFX grants legitimacy to crypto exchanges and paves the way for the government to monitor digital currency transactions for tax purposes. However, implementing custodian services for asset storage and liquidity monitoring and a clearing house for recording transactions remains a challenge.
The forthcoming regulatory overhaul in 2025, shifting oversight from Bappebti to the Financial Services Authority (OJK), could potentially lead to the reclassification of crypto as securities. This might bring about favorable changes for crypto traders, potentially reducing value-added tax (VAT) and income tax (PPh), creating an environment where Indonesia can compete globally in the ever-evolving cryptocurrency landscape.
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