While China sent the entire cryptocurrency market in a frenzy, Indonesia came forward to state that it will not be replicating its neighbor’s moves in completely banning all cryptocurrencies transactions. Rather than a blanket ban, the country is looking to introduce measures that would keep illegal activities related to cryptocurrencies at bay.
Speaking to local media, the Southeast Asian country’s Minister of Trade, Muhammad Luthfi said, “We don’t prohibit it, but we will tighten the regulations.”
In Indonesia, cryptocurrencies like Bitcoin are considered to be assets or commodities and are allowed to be traded as such. Crypto asset trading was legalized in 2018 by the Ministry of Trade. However, the usage of coins as currencies has been made illegal.
Earlier in June, the Indonesian Central Bank banned transactions and payments carried out through cryptocurrencies, or their used in the form of “other financial services tools.”
Despite these measures, cryptocurrency trade in Indonesia has been booming in the past 18 months, with transaction volumes in 2020 as high as $4.5B. Data from the country’s Futures Exchange Supervisory Board (Bappebti) noted that total cryptocurrency transactions in the 13 exchanges approved by the board had grown by 40% during the first five months of this year. The number of individuals involving in crypto asset trade also went up to 6.5 million from 4 million during this time.
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