Blockchain Regulation and Landscape In Indonesia

Asia Blockchain Review
November 6, 2019

Jakarta, October 30, 2019 – Blockchain has been a hot topic in Indonesia in recent years. Starting with the crypto assets boom in 2017, various perceptions on matters ranging from crypto assets to the application of blockchain technology itself have been frequently discussed in Indonesia, even among regulators. 

After prohibiting crypto assets in early 2018, the Indonesian government finally started realizing the potential of blockchain and crypto assets and decided to open up. At the end of 2018, the Ministry of Trade released Regulation No. 99, officially classifying cryptocurrencies as commodities (crypto-assets) under the auspices of the Commodity Futures Trading Regulatory Agency (Bappebti). 

Since then, several government agencies have been actively involved in developing regulations relating to crypto-assets. Below are the major government bodies that will be overseeing the crypto-asset industry of Indonesia: 

Commodity Futures Trading Regulatory Agency (BAPPEBTI) 

BAPPEBTI is the main regulator involved in the supervision of futures trading activities in Indonesia, including forex and crypto-assets trading. Therefore, intermediaries involved in commodity trading, such as crypto-asset exchanges, will be under the supervision of BAPPEBTI. 

As an official government agency, BAPPEBTI operates directly under the Minister of Trade. Moreover, BAPPEBTI is also connected with the Bank Indonesia (BI) and legal institutions such as the National Police. 

Regulations on trading crypto assets were issued by BAPPEBTI through Regulation No. 5 and No. 9 of 2019 that cover the Technical Provisions for the Implementation of the Crypto Asset Physical Market in the Futures Exchange. With the release of these regulations, the sale and purchase of crypto assets in Indonesia have been officially legalized. The BAPPEBTI regulation has thus become a mandatory requirement for crypto exchanges to operate legally in Indonesia. 

Indonesian Financial Transaction Reports and Analysis Center (PPATK) 

Indonesian Financial Transaction Reports and Analysis Center is an independent institution established in the context of preventing and eradicating money laundering in Indonesia. This institution has the authority to implement policies on preventing and eradicating money laundering, as well as developing anti-money laundering and counter-terrorism financing regimes in Indonesia. PPATK, which is directly accountable to the President of the Republic of Indonesia, is independent and free from any interference or influence of power. In terms of crypto-asset trading, PPATK will oversee transactions and ensure no money laundering or terrorism financing is conducted using crypto-assets. 

Bank Indonesia (BI) 

Bank Indonesia (BI) is the central bank of the Republic of Indonesia in accordance with Article 23D of the Constitution of the Republic of Indonesia (UUD) and Act No. 23 of 1999 concerning Bank Indonesia. As a central bank, the sole objective of the BI is to achieve and maintain the stability of the rupiah. The stability of the rupiah’s value contains two dimensions, namely the stability of the value of the currency against domestic goods and services (inflation), as well as the stability of other countries’ currencies (exchange rates). Bank Indonesia has so far actively studied blockchain technology and how to maximize its application in supporting the financial industry, including payment and loans. 

These three government agencies are actively communicating with all blockchain players in Indonesia, including crypto-asset exchanges such as Tokocrypto and local blockchain projects. As a form of positive collaboration, existing regulators have expressed their support and will be participating in the upcoming INBLOCKS Conference 2019, Jakarta, from November 19-20, and Indonesia Blockchain Week 2019, from November 18-24, to share their insights and directions towards the development of the Indonesia Blockchain space. 


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