Crypto regulations to be updated by Indonesian government, more local control to be implemented

    Exchanges of cryptocurrencies may soon be subject to new regulations in Indonesia. A deputy minister said on Tuesday that the trade ministry of the South Asian nation’s government is planning to issue new regulations to govern cryptocurrency exchanges. These regulations will mandate that two-thirds of the board of directors and commissioners of cryptocurrency exchanges must be citizens of Indonesia and reside in the country.

    Because of the financial difficulties that the cryptocurrency exchange Zipmex is presently experiencing, this modification has been necessary as a result of the fact that it has prevented consumers from withdrawing cash.

    Deputy Trade Minister Jerry Sambuaga told reporters during a parliamentary session, “We don’t want to provide licences (to exchanges) haphazardly, so only for those who satisfy the conditions and are reliable.” “We don’t want to grant permits (to exchanges) carelessly”

    Sambuaga further said that the Commodity Futures Trading Regulatory Agency (Bappebti) of the ministry would announce the new regulation in the very near future.

    On the other hand, a timetable has not been presented.

    According to a document that was released by the ministry, the new regulation would require an exchange to utilise a third party to keep client money and will restrict exchanges from re-investing stored crypto assets. Both of these provisions were included in the new rule.

    At a parliamentary hearing, the interim chairman of Bappebti, Didid Noordiatmoko, said that guaranteeing that two-thirds of the board were Indonesians living in the nation “might prevent the senior management from going away when a crisis strikes the exchange.”

    Sambuaga continued by saying that the proposal to build an Indonesian crypto asset market might potentially be finished by the end of this year. Since the previous year, it has been consistently behind schedule.

    According to a report published by Deal Street Asia, the proposed exchange for digital assets is an attempt by the government to protect its masses as interest in cryptocurrencies has continued to grow among the populace. This is because the government is aware that the interest in cryptocurrencies has continued to grow.

    The launch of the cryptocurrency exchange had been scheduled for the year 2021 however it was subsequently pushed back to the first three months of 2022. Because of the intricacy of the situation, the government was compelled to abandon the plan to date, thus the delay of the opening of the exchange did not affect it.

    According to the statistics provided by Bappebti, cryptocurrency has recently acquired popularity in the nation with the most robust economy in Southeast Asia. In 2021, the entire transaction volume of crypto assets reached 859.4 trillion rupiahs, which is equivalent to $57.37 billion.

    The performance of the nation with regard to the collection of transaction taxes has also improved.

    According to a member of the nation’s tax compliance special staff named Yon Arsal, Indonesia has gathered close to $6.8 million in revenue since the implementation of taxes on fintech and cryptocurrency transactions in May.

    On May 1 of this year, the Indonesian Ministry of Finance implemented a value-added tax (VAT) of 0.1% on the acquisition of cryptocurrencies and digital assets.

    Due to the rapidly growing popularity among local investors, the Indonesian government has made the decision to tax cryptocurrency transactions. In addition to this, since since the COVID-19 outbreak broke out in Indonesia, interest in cryptocurrencies has been through the roof. In 2021, the number of people who owned cryptocurrency reached 11 million.

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