Indonesia’s national crypto exchange goes live after delays

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Indonesia’s long-awaited national crypto asset exchange has finally gone live after multiple delays, announced the country’s commodities regulator on Thursday.

The new cryptocurrency exchange and clearinghouse went live on July 17. The government had initially planned to launch the exchange by the end of 2021. It is expected to play a significant role in developing the crypto industry in the country and, eventually, Southeast Asia.

Unlike other crypto exchanges, such as Binance or Coinbase, this new platform is government-approved and resembles traditional securities markets, like the New York Stock Exchange. It is designed to provide a fair and secure trading ecosystem while prioritizing customer protection.

The head of the Indonesian Commodity Futures Trading Regulatory Agency (Bappebti), Didid Noordiatmoko, emphasized the government’s commitment to ensuring legal certainty and minimizing crypto-related risks.

“The establishment of exchanges, clearinghouses and managers of crypto asset storage is proof that the government is present in an effort to create a fair crypto asset trading ecosystem to guarantee legal certainty and prioritize protection for the public as customers,” said Noordiatmoko.

According to Coindesk Indonesia, Bappebti will collaborate with the country’s Financial Services Authority (OJK), the central bank and the Ministry of Finance to operate the new cryptocurrency exchange.

Crypto industry in Indonesia

Indonesia’s growing interest in crypto assets indicates the country’s commitment to economic growth and global presence. Analysts say launching the national exchange can attract domestic and international investors, boosting the country’s economic growth. At the same time, it strengthens Indonesia’s position in the global cryptocurrency market.

Last month, Bappebti approved the trading of 501 crypto tokens as part of a broader initiative to regulate and facilitate digital asset trading in the country.

Some of those approved crypto assets, such as Cardano (ADA), Solana (SOL), Polygon (MATIC) and The Sandbox (SAND), have been the subject of regulatory scrutiny in the U.S. The Securities and Exchange Commission (SEC) has raised concerns about whether these tokens qualify as securities.

According to Bappebti, the number of crypto investors in Indonesia increased by 0.64 percent to 17.25 million in April 2023 from 17.14 million in March 2023. This number represents a year-over-year increase of 25.64 percent from 13.73 million in April 2022.

Tether (USDT), Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) and Binance Coin (BNB) were among the most traded assets.

However, the total transaction value in the first half of 2023 was down 68.65 percent from the same period last year, 66.44 trillion rupiah (around $4.4 million). This figure aligns with the global crypto market, which has seen a decline in both transactions and prices.

Although cryptocurrencies are popular in Indonesia, they are not recognized as legal tender. As a result, they are officially referred to as assets, not currencies.

Right time for Indonesia’s crypto market

Indonesia’s launch of its crypto exchange is timely, according to Christopher Tahir, co-founder of CryptoWatch, a community focused on educating users about cryptocurrencies. He noted that the concept is excellent, but the key is to put it into practice.

“Everything is still at the conceptual stage, and nothing has been put into practice,” said Tahir. “Thus, everything is in order when viewed through the lens of the Indonesia Stock Exchange. As a result, this mechanism is applicable for crypto.”

He also said the exchange could improve the liquidity of the Indonesian crypto sector. The lack of liquidity has prompted some people to move their crypto trading abroad.