Indonesia has witnessed an impressive surge in cryptocurrency transactions, with the total reaching IDR 30 trillion ($1.92 billion) in February, according to the country’s crypto regulator.
The Commodity Futures Trading Supervisory Agency (Bappebti) reported that the number of registered crypto investors in the country also experienced substantial growth, reaching 19 million last month, with an increase of 170,000 users compared to January.
The remarkable rise in crypto transactions can be attributed to positive market sentiments fueled by the surge in Bitcoin’s (BTC) price and the rally in altcoins, which refers to tokens other than Bitcoin.
Indonesia to Surpass Transaction Volume Recorded in 2021
The regulator said that Indonesia could match or surpass the transaction volume achieved during the 2021 bull run, which amounted to $51.28 billion.
Tirta Karma Senjaya, a representative from Bappebti, said that a rebound in 2024 is anticipated, considering the downward trend observed in 2022 and 2023.
The upcoming Bitcoin halving is seen as a key catalyst for this expected resurgence.
To achieve the target of increased crypto transactions, Bappebti believes that reducing or eliminating taxes on cryptocurrencies would be a favorable approach.
Currently, crypto transactions are subject to a 0.10% tax for Income Tax and a 0.11% tax for Value Added Tax (VAT) on users, while exchanges face a 0.02% tax per transaction for the crypto bourse, depository, and clearing house.
“I’ve previously said that this industry (crypto) is still in its embryonic stage, so imposing heavy taxes might kill the industry,” Tirta said during a recent Reku exchange event.
Furthermore, the transfer of crypto oversight to the Financial Services Authority (OJK) in January 2025 is expected to bring significant changes.
This transition could involve reclassifying cryptocurrencies as securities and revising VAT policies, potentially shaping the regulatory landscape for cryptocurrencies in Indonesia.
Indonesia Issues New Crypto Regulations
Last week, Indonesia’s financial services regulator, the Financial Services Authority (OJK), issued new regulations that will come into effect in January 2025.
These regulations will provide guidance to banks, insurance companies, and other entities in the financial industry on how to leverage new technologies and explore innovative possibilities.
The newly implemented rules acknowledge the impact of technological advancements on various financial products and services, as well as the digital operations of companies.
While the regulations do not delve into specific details, they lay the groundwork for managing advancements in the crypto space within the finance sector.
To facilitate a smooth transition, the OJK is collaborating closely with the current crypto regulator, Bappebti, and the central bank of Indonesia, Bank Indonesia.
Together, they are forming a transition team to manage the shift in supervision of digital financial assets.
In addition to domestic efforts, the OJK has been engaging in international collaborations to establish a comprehensive crypto policy.
The agency has forged partnerships with financial authorities from Malaysia, Singapore, and Dubai to develop a robust framework for crypto regulation.
It has also drafted Memorandums of Understanding with Malaysia’s Bank Negara, Singapore’s Monetary Authority, and Dubai’s Virtual Asset Regulatory Authority.
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