The Indonesian Cryptocurrency Community In 2022: A Snapshot

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

It is getting to the point where crypto is becoming more popular than traditional stock. Deputy Commerce Minister Jerry Sambuaga said that more than 11 million Indonesians bought or sold crypto in 2021. In comparison, according to Indonesia’s central securities depository, the total number of portfolio investors – indicated by the number of unique investor identities – reached 7.35 million. in 2021.

Even so, 11 million crypto investors still only make up about 4% of Indonesia’s total population, which means there’s still plenty of room to grow. The growth of the crypto community in Indonesia goes hand in hand with several supportive local phenomena, including but not limited to:

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

Regulators aim to make things safer

Although crypto-assets are still not allowed as payment instruments, businesses are encouraged to buy and sell cryptocurrencies as commercial commodities in Indonesia. As of 2019, cryptocurrency trading in Indonesia is officially supervised and regulated by the Commodity Futures Trading Regulatory Agency (BAPPEBTI), a body under the Ministry of Commerce.

This governing body is, among other things, responsible for monitoring, documenting and approving companies and commodities that are allowed to be traded in Indonesia. From 2021, its whitelist authorized crypto tokens reached 229 items, including popular assets such as Bitcoin, Ether (ETH), Polkadot (DOT), and Cardano (ADA).

These are allowed based on BAPPEBTI’s own verification methods, considering market capitalization rankings as well as security, development team background checks, blockchain system management and roadmaps development with verifiable measures of success.

In an official statement, the governing body reiterated its primary goal of providing legal certainty and protecting the interests of Indonesian crypto consumers. BAPPEBTI said:

“With the new rules we had released, we hope that we and the crypto exchanges in Indonesia can work together to 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 services companies, such as lending or credit services, from marketing or facilitating crypto trading, reiterating BAPPEBTI’s regulation that all crypto exchanges crypto must be specifically registered with them.

The aforementioned boom in the number of crypto and stock investors in Indonesia goes hand in hand with the growing popularity of fintech apps, such as Bareksa and Ajaib, which means that a large portion of these new investors could be novices. Tokocrypto, a major local crypto exchange, has declared its intention to work with the government to make trading safer by helping to educate investors about the risks of crypto trading and how to avoid legally dodgy exchanges and assets.

Companies considering driving crypto adoption in Indonesia should establish an active and positive working relationship with the government and ensure compliance with all of its regulations to gain the trust of local consumers.

17 Registered Crypto Exchanges in Indonesia

Until March 2022, 17 companies were registered and authorized by BAPPEBTI to trade cryptocurrencies in Indonesia, with their user bases growing rapidly. Market leader Indodax said it reached 5 million members in 2022, a 104% increase from 2021. Another major exchange, Tokocrypto, said it reached 2 million members by the end of 2021, i.e. an eightfold increase compared to 2020.

As mentioned above, an important factor contributing to the success of these platforms is their mobile-first strategy, with easily accessible apps. With Indonesia’s internet penetration rate of 73.7% in 2021, it’s no wonder the country’s mobile user base is more attractive.

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

Steven Suhadi, co-founder of Indonesia Crypto Network and founding member of Indonesia Blockchain Association, told Cointelegraph: “Over the past 10 years, Indonesian regulators have adapted to changes in technology, from e-commerce to carpooling and , more recently. , P2P [peer-to-peer] ready. Indonesia already has clearly defined rules for crypto exchanges and trading. Over the past 24 months, regulators have taken more proactive steps for digital assets, which will help Bitcoin and cryptocurrencies proliferate in Indonesia.

More supply means more demand, and with more players entering the country, the stage is set for a further surge in crypto 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. The MDI portfolio has several companies that have become household names in Indonesia, including fintech leaders Kredivo and KoinWorks.

Binance Founder and CEO Changpeng Zhao expressed his confidence and goals regarding Indonesian crypto, saying, “With rapid 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 echoed by MDI CEO Donald Wihardja who said: “Cryptocurrencies, crypto assets and the underlying technology, blockchain, represent an undeniably important part of financial and other digital infrastructure at the future.”

It will be worth watching this partnership closely in the future, but for now, it can be seen as a sign that crypto is no longer a niche market in Indonesia. More and more mainstream players have started getting into it, which could mean more resources and momentum to increase adoption.

What’s next for Indonesia?

With the upward trend in transaction volume and number of merchants as well as exchanges in recent years, we can assume that crypto and blockchain will only get bigger in 2022 and beyond. Non-fungible tokens (NFTs) recently came into the spotlight in Indonesia following the news of Ghozali, a computer science student who earned over $1 million selling NFT selfies on OpenSea. With Indonesia’s booming crypto community and an already vibrant art scene, NFTs could be the final chapter in Indonesia’s crypto journey – either way, it’s become an emerging market to watch.

Reporting by Diaz Praditya.

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The Indonesian Cryptocurrency Community In 2022: A Snapshot

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