Indonesia’s cryptocurrency community in 2022: An overview

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Cryp­to is the next big thing in Indone­sia. Accord­ing to the Min­istry of Trade, trans­ac­tions for cur­ren­cies like Bit­coin (BTC) grew over 14 times from a total of 60 tril­lion rupi­ahs ($4.1 bil­lion) in 2020 to a total of 859 tril­lion rupi­ahs ($59.83 bil­lion) in 2021.

It’s get­ting to the point where cryp­to is becom­ing more pop­u­lar than tra­di­tion­al stock. Vice Min­is­ter of Trade Jer­ry Sam­bua­ga stat­ed that more than 11 mil­lion Indone­sians bought or sold cryp­to in 2021. In com­par­i­son, accord­ing to the Indone­sian Cen­tral Secu­ri­ties Depos­i­to­ry, the total num­ber of port­fo­lio investors — indi­cat­ed by the num­ber of sin­gle investor iden­ti­ties — reached 7.35 mil­lion in 2021.

Even so, 11 mil­lion cryp­to investors is still only about 4% of Indonesia’s total pop­u­la­tion, mean­ing there’s still plen­ty of room to grow. The cryp­to community’s growth in Indone­sia goes hand-in-hand with sev­er­al sup­port­ing local phe­nom­e­na, includ­ing but not lim­it­ed to:

  • Reg­u­la­to­ry sup­port from gov­ern­ment bodies
  • Increased ease of access to cryp­tocur­ren­cy trading
  • Adop­tion from major local tech players

Regulators aim to make things more secure

Although cryp­to assets are still not per­mit­ted as pay­ment instru­ments, com­pa­nies are wel­come to buy and sell cryp­to as trad­ing com­modi­ties in Indone­sia. Since 2019, cryp­tocur­ren­cy trad­ing in Indone­sia has been offi­cial­ly over­seen and reg­u­lat­ed by the Com­mod­i­ty Futures Trad­ing Reg­u­la­to­ry Agency (BAPPEBTI), a body under the Min­istry of Trade. 

This gov­ern­ing body is, among oth­er things, in charge of vet­ting, doc­u­ment­ing and approv­ing com­pa­nies and com­mod­i­ty items allowed to be trad­ed in Indone­sia. As of 2021, its whitelist of per­mit­ted cryp­to tokens reached 229 items, includ­ing pop­u­lar assets such as Bit­coin, Ether (ETH), Polka­dot (DOT) and Car­dano (ADA).

These items are per­mit­ted based on BAPPEBTI’s own vet­ting meth­ods, con­sid­er­ing mar­ket cap­i­tal­iza­tion rank­ings as well as secu­ri­ty, back­ground checks on the devel­op­ment teams, blockchain sys­tem man­age­ment, and devel­op­ment roadmaps with ver­i­fi­able suc­cess metrics.

In an offi­cial state­ment, the gov­ern­ing body iter­at­ed its main objec­tive of pro­vid­ing legal secu­ri­ty and pro­tect­ing the inter­ests of Indone­sian cryp­to con­sumers. BAPPEBTI stated:

“With the new rules that we had pub­lished, it is hoped that we and cryp­to exchanges in Indone­sia could work togeth­er to help ensure that every cryp­to trans­ac­tion is legal­ly reg­u­lat­ed and safe for investors in Indonesia.”

Anoth­er gov­ern­ing body, the Finan­cial Ser­vice Author­i­ty, has specif­i­cal­ly pro­hib­it­ed finan­cial ser­vice com­pa­nies, such as lend­ing or cred­it ser­vices, from mar­ket­ing or facil­i­tat­ing cryp­to trad­ing, reit­er­at­ing BAPPEBTI’s reg­u­la­tion that all cryp­to exchanges must be specif­i­cal­ly reg­is­tered with them.

The afore­men­tioned boom in the num­ber of both cryp­to and stock investors in Indone­sia goes hand-in-hand with the ris­ing pop­u­lar­i­ty of fin­tech apps, such as Barek­sa and Ajaib, mean­ing that a large por­tion of these new investors might be novices. Tokocryp­to, a promi­nent local cryp­to exchange, has stat­ed its intent to work togeth­er with the gov­ern­ment to make trad­ing more secure by help­ing edu­cate investors about the risks of cryp­to trad­ing and how to avoid legal­ly dubi­ous exchanges and assets.

Com­pa­nies that plan to boost cryp­to adop­tion in Indone­sia would need to build an active and pos­i­tive work­ing rela­tion­ship with the gov­ern­ment and ensure com­pli­ance with all of its reg­u­la­tions to gain local con­sumers’ trust.

17 registered crypto exchanges in Indonesia

Until March 2022, there have been 17 com­pa­nies reg­is­tered and per­mit­ted by BAPPEBTI to exchange cryp­tocur­ren­cies in Indone­sia, with their user­bas­es rapid­ly increas­ing. A mar­ket leader, Indo­dax report­ed reach­ing 5 mil­lion mem­bers in 2022, a 104% increase com­pared to 2021. Anoth­er promi­nent exchange, Tokocryp­to, had report­ed reach­ing 2 mil­lion mem­bers by the end of 2021, an eight­fold increase com­pared to 2020.

As men­tioned above, a large con­tribut­ing fac­tor to these plat­forms’ suc­cess is their mobile-first strat­e­gy, with eas­i­ly acces­si­ble apps. With Indonesia’s inter­net pen­e­tra­tion stand­ing at 73.7% in 2021, it’s no won­der that there’s more trac­tion from the country’s mobile-heavy user base.

Indonesia’s cryp­to com­mu­ni­ty is also grow­ing beyond just exchanges. The Indone­sia Blockchain Asso­ci­a­tion, a local con­sor­tium and advo­ca­cy group for blockchain and cryp­tocur­ren­cies, has 28 mem­ber com­pa­nies and orga­ni­za­tions as of 2022. The asso­ci­a­tion com­pris­es not only exchanges but also star­tups and tech com­pa­nies using blockchain in their ecosys­tem and media plat­forms spe­cial­iz­ing in crypto.

Steven Suha­di, co-founder of Indone­sia Cryp­to Net­work and found­ing mem­ber of the Indone­sia Blockchain Asso­ci­a­tion, told Coin­tele­graph, “Reg­u­la­tors in Indone­sia over the past 10 years have become adapt­able to tech­no­log­i­cal changes, from e‑commerce to ride-hail­ing and, most recent­ly, P2P [peer-to-peer] lend­ing. Indone­sia has clear­ly-defined rules for exchanges and cryp­to trad­ing already. Over the last 24 months, reg­u­la­tors have tak­en more proac­tive steps for dig­i­tal assets, which will help to pro­lif­er­ate Bit­coin and cryp­tocur­ren­cies in Indonesia.”

More sup­ply means more demand, and with more play­ers enter­ing the coun­try, the stage is set for anoth­er boost in crypto’s popularity.

Local tech leaders welcome crypto with open arms

In Decem­ber 2021, cryp­to exchange Binance announced a joint ven­ture with a con­sor­tium led by MDI Ven­tures to devel­op a new dig­i­tal asset exchange in Indonesia.

MDI is the $830-mil­lion ven­ture cap­i­tal arm of Indonesia’s largest telecom­mu­ni­ca­tions com­pa­ny, Telkom Indone­sia. MDI’s port­fo­lio boasts sev­er­al com­pa­nies that have gone on to become house­hold names in Indone­sia, includ­ing finan­cial tech­nol­o­gy lead­ers Kre­di­vo and KoinWorks.

Binance founder and CEO Chang­peng Zhao has expressed his con­fi­dence and objec­tives regard­ing cryp­to in Indone­sia, stat­ing, “With fast tech­nol­o­gy adop­tion and strong eco­nom­ic poten­tial, Indone­sia could become one of the lead­ing cen­ters of the blockchain and cryp­to ecosys­tem in South­east Asia.”

This sen­ti­ment was repeat­ed by MDI CEO Don­ald Wihard­ja, who stat­ed, “Cryp­tocur­ren­cies, cryp­to assets, and the under­ly­ing tech­nol­o­gy, blockchain, present an unde­ni­ably impor­tant part of the finan­cial and oth­er dig­i­tal infra­struc­tures in the future.”

It’ll be worth keep­ing a close eye on this part­ner­ship in the future, but right now, it can be con­sid­ered a sign that cryp­to is no longer a niche mar­ket in Indone­sia. More main­stream play­ers have start­ed mov­ing into it, which could mean more resources and momen­tum to increase adoption.

What’s next for Indonesia?

With the ris­ing trend in trans­ac­tion vol­ume and the num­ber of traders as well as exchanges in recent years, we can assume that cryp­to and blockchain will only get big­ger in 2022 and beyond. Non­fun­gi­ble tokens (NFT) recent­ly stepped into the spot­light in Indone­sia after news broke about Ghoza­li, a com­put­er sci­ence stu­dent who made over $1 mil­lion from sell­ing NFT self­ies on OpenSea. With Indonesia’s bur­geon­ing cryp­to com­mu­ni­ty and already vibrant artis­tic scene, NFTs might be the lat­est chap­ter in Indonesia’s cryp­to jour­ney — either way, it’s become an emerg­ing mar­ket to watch out for.

Report­ing by Diaz Praditya.



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