Crypto Exchanges in Indonesia Must Register to Operate

Crypto exchanges in Indonesia must register to operate

According to information from Bitcoin Magazine, Indonesia’s first national cryptocurrency exchange, Commodity Futures Exchange (CFX), officially went into operation on July 17, 2023 after many delays in its launch schedule since then from 2021. Now, the Indonesian government aims to register every other cryptocurrency exchange in the country with CFX to continue operating.

CFX operates in a similar way to traditional stock exchanges like NASDAQ, unlike cryptocurrency exchanges like Binance or Coinbase. All activities and services on CFX will be approved by the Indonesian government.

This national cryptocurrency trading platform can be seen as the Indonesian government’s response to the rising domestic cryptocurrency market. According to official figures for 2023, Indonesia has more than 18 million registered cryptocurrency trading participants, compared with about 12 million stock trading participants.

JUST IN: 🇮🇩 Indonesia launches national #Bitcoin and crypto exchange pic.twitter.com/kNFNcVvYvz

— Bitcoin Magazine (@BitcoinMagazine) July 21, 2023

According to regulations issued in 2019 by the Indonesian Commodity Futures Trading Supervisory Authority (Bappebti), all cryptocurrency exchanges operating in the country must register and receive a PFAK license. Currently, cryptocurrency exchanges that have been operating in Indonesia since 2014 are classified as “potential crypto exchanges”.

Under the new regulations, licenses will only be issued to “prospective crypto exchanges” after a rigorous vetting process, including registration with a self-regulatory organization (SRO) and inspection from Bappebti.

Registration deadline is before August 17, 2024. If they do not register before the deadline, these exchanges will not be able to continue operating in Indonesia. After completing the process, the exchanges will be recognized as legal businesses affiliated with CFX.

CFX Chairman, Mr. Subani, said there are currently 29 “potential crypto exchanges” in Indonesia that need to register under the new regulations.

The decision of the Indonesian financial regulator to force crypto exchanges to register through CFX can be understood as a measure for the Government to monitor tax collection.

It is expected that in the future, there will be additional asset custody and liquidity monitoring services, as well as a payment center to record transactions for tax compliance. This all depends on how Indonesia classifies cryptocurrencies as commodities by 2025. Bappebti will work with the country’s Financial Services Authority (OJK), Central Bank and Ministry of Finance to regulate this platform.

Indonesia is one of the few Southeast Asian countries with clear legislation for cryptocurrencies. In June, the country announced support for more than 500 types of tokens that are allowed to be traded in the country. Previously, Indonesia also licensed the operation of domestic exchanges such as Tokocrypto, the platform acquired by Binance.