The Indonesian government is reportedly racing to finalize the authority transfer to oversee the crypto industry from the Commodity Futures Trading Agency (Bappebti) under the Trade Ministry to the Financial Services Authority (OJK) ahead of its approaching deadline.
Indonesia’s Crypto Oversight Transition Stalled
On Thursday, OJK Chairman Mahendra Siregar talked about the preparations for the crypto authority transition at the 2025 stock market opening event in Jakarta. Mahendra revealed that discussions and arrangements are ongoing, with the draft government regulation prepared in an official format, the Jakarta Globe reports.
The transition, scheduled to be completed by January 12, will transfer the crypto industry’s supervision from the Commodity Futures Trading Agency, which has overseen digital assets since 2018, to the Financial Services Authority.
The transfer has been reportedly stalled due to “the absence of a supporting government regulation.” Finance Minister Sri Mulyani Indrawati introduced the plan in late 2022. The bill is expected to become law once the legislative and executive branches of the Indonesian government reach an agreement on all provisions.
By January 2, 2025, the official bill for the transition has yet to be published, but the OJK Chairman stated the agency has “been working closely with the Trade Ministry to ensure a seamless process.” Mahendra added, “Once the regulation is issued, it will provide the legal basis for the transition.”
The transfer to OJK is expected to foster a more transparent and comprehensive regulatory framework that aligns with international standards. However, Bappebti Chief Kasan explained that the existing rules will remain effective until the new regulation is enacted.
According to the report, OJK Commissioner Hasan Fawzi detailed that the agency “conducted in-depth studies on global practices in crypto regulation and prepared its workforce for the role.”
Indonesia’s Landscape
Nailul Huda, a digital economy expert, criticized the transition delay, adding that the slow response suggests reluctance from the Trade Ministry to relinquish its supervisory role. He asserted that “while OJK oversight may bring stricter regulations, its experience will benefit investors.”
Moreover, several brokers and crypto exchanges reportedly believe the transition will streamline regulatory oversight and allow direct transactions under the supervision of OJK and the Bank of Indonesia.
It’s worth noting that the Indonesian government has been criticized for its regulatory measures and cautious approach, which prohibited using cryptocurrencies as a direct payment method for goods and services. Similarly, various industry players consider the country’s dual taxation on crypto potentially hindered the market’s growth in recent years.
Despite the regulatory landscape, Indonesia has one of the highest adoption rates in the world. Bappebti reported that over 18.51 million people invested in cryptocurrencies in 2023. That year, the country ranked 7th in Chainalysis’ global crypto adoption ranks.
By 2024, Indonesia ranked 3rd, surpassing countries like the United States and Russia and becoming one of the largest nations by crypto trader numbers. Additionally, the country’s market recorded a 350% year-on-year (YoY) increase in crypto transactions, crossing $30 billion between January and October.
Bitcoin (BTC) is trading at $96,819 in the one-week chart. Source: BTCUSDT on TradingView
Featured Image from Unsplash.com, Chart from TradingView.com
