In a recent publication, the Indonesian regulators launched the first national bourse for digital assets. The newly launched bourse dubbed Commodity Future Exchange (CFX) exhibits similar features to the global stock market index Nasdaq.
The only difference between the CFX and Nasdaq is that the bourse is designed to allow traders to engage in regulated buying and selling of digital assets. In the report, the Indonesian regulators underlined that it will be mandatory for local exchanges to register with the bourse.
Indonesian Regulators Develop New Bourse for Digital Assets
Launching the bourse came when Indonesia sought to become home to fast-paced crypto firms. Besides the efforts made by the regulators to create a friendly environment for digital assets Indonesia, a growing number of crypto-savvy population.
In a recent report, the number of registered crypto traders in Indonesia reached 18 million this year, while stock traders stood at 12 million. With the exciting growth of crypto adoption, Indonesia’s regulators have taken strategic actions to ensure the digital sector is regulated.
The primary objective of launching the bourse is to provide the investors with a safe and secure trading environment. The changes in the Indonesian regulatory approach will force crypto firms to monitor transactions and comply with tax requirements.
A review of the existing crypto regulations demonstrated that the Indonesian Commodity Futures Trading Supervisory Agency (Bappebti) mandates local exchanges to seek regulatory authorization to proceed with crypto-related activities.
The Indonesian authorization regime subjects crypto firms to thorough regulatory assessment to allow the government agencies to examine the compliance level of the firm before it’s listed at the CFX.
Reportedly, the authorization regime was enforced in 2019 to ensure crypto firms operate competently.
Rise of Crypto-Savvy Population in Indonesia
A review of the authorization process demonstrated that local exchanges were required to register with self-regulatory organizations (SROs), such as the CFX, before proceeding with the Bappebti regulatory checks.
Even though the procedures for obtaining the Indonesia virtual assets service provider (VASP) license are lengthy, Bappebti engages in an intense regulatory exercise to assess the compliance of the applicant.
A statement from Robby Bun, the chairman of the country’s crypto asset trade association, Aspakrindo, confirmed that Indonesia is among the Asian countries with stringent crypto rules.
The executive mentioned that the applicant must meet the regulatory requirements before the Indonesian regulators approve the crypto exchange license. Failure to comply with the licensing requirement bars the potential crypto exchange from operating in Indonesia.
A review of the Indonesia crypto rules demonstrated that the investors seeking to operate have up to August 17, 2024, to complete the registration process. Bun underlined that non-compliant firms will be restricted from operating in Indonesia after the set deadline.
The executive advised the crypto exchange to start the registration for the license process as soon as possible.
Indonesia Seek to Regulate the Crypto Sector
With the new regulatory approach for digital assets, Bun acts as a mediator between the crypto exchange and the regulators.
The executive underlined the importance of registering with the CFX in Indonesia. He confessed that registering crypto entities allows regulators to optimize their digital space regulation efforts.
Bun anticipates that with the new rule, Indonesia will focus on regulating other crypto-related activities, such as custodial and liquidity protocol. The executive was pleased to state that Indonesia’s already established crypto firms have upheld compliance with the law.
However, Bun outlined the potential regulatory gaps in regulating crypto clearing and custodial services. He admitted that the regulators have made several amendments to crypto regulations for the past few months.
In May, the regulators imposed a tax regime on crypto assets classified as commodities. Bun noted that crypto assets grouped as securities were exempted from taxes. He anticipates that in the future, regulators might consider reducing the tax burden by eliminating the value-added tax (VAT) and income tax (PPh) on certain digital assets.
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