a regulatory guide for cryptocurrency in indonesia

A Regulatory Guide to Cryptocurrency in Indonesia

  • InCorp Editorial Team
  • 27 October 2021
  • 4 minutes reading time

Cryptocurrency has grown in popularity, and Indonesian regulators are still trying to catch up. Hence, foreign investors interested in this untapped market should be mindful of the present regulatory environment around cryptocurrencies.

This article will summarize the existing regulation regarding the cryptocurrency market in Indonesia.

The Indonesian currency is determined by law, according to Article 23B of the country’s constitution, and the currency legislation of 2011 mandates that nearly all financial transactions in Indonesia be conducted in Rupiah, the country’s only recognized currency. Only International transactions, government spending, and bank deposits are exempt.

The purchase and selling of cryptocurrencies in Indonesia are only authorized for investment reasons or for legally specified crypto assets, according to the country’s legislation. However, the central bank recently underlined that cryptocurrencies are not a valid method of payment. Banks are forbidden to facilitate the use of cryptocurrency as a form of payment.

Indonesia Recognizes Cryptocurrency as a Trading Commodity Only

The Ministry of Trade Regulation No. 99 of 2018 formally authorized crypto asset trading and decreed it lawful. Furthermore, the Indonesian Commodity Futures Trading Supervisory Authority, or Bappebti, published Regulation No. 5 of 2019 to provide a thorough regulatory framework for the crypto-assets future.

According to data from the Blockchain Association of Indonesia, the number of investors has risen by 280% since 2020, from 1.5 million to 4.2 million, with a daily trading volume reaching USD 117.4 million.

These Bappebti Regulations in Indonesia have made significant progress toward building a comprehensive legal framework that will guarantee that the crypto sector thrives in the country, even if it is not yet accepted for payment.

Existing Cryptocurrency Regulations in Indonesia

Key Regulations

  • Bappebti Regulation No. 7 (2020): Bappebti has compiled a list of 229 crypto assets that may be traded lawfully on future exchanges.
  • Bappebti Regulation No. 5 (2019): Bitcoin has been recognized as a commodity and the regulatory standards for cryptocurrency exchanges also has been classified.

Obligations

In addition to the 229 cryptocurrencies that will be traded in Indonesia, Bappebti Regulation No. 7/2020 defines prospective crypto-assets physical traders (calon pedagang fisik aset kripto) and crypto-assets physical traders (pedagang fisik aset kripto) as platforms where customers can buy and sell crypto-assets.

Bappebti additionally establishes the following responsibilities for crypto-asset physical traders in the same regulation:

  • establish standard operating procedures for monitoring and evaluating the crypto-assets exchanged by the trader;
  • the crypto-assets being exchanged by the crypto-assets physical trader are monitored and assessed independently and actively;
  • actively report to Bappebti, the Cryptoassets Futures Exchange, and the Cryptoassets Committee the outcomes of the monitoring and assessment of traded crypto-assets;
  • unilaterally impose limitations on crypto-assets that fail to meet the trader’s risk standards.

Cryptocurrency Indonesia: Requirements for Foreign Investors

Since Indonesia presently lacks a crypto-asset future exchange, the Bappebti registration is temporarily closed. Crypto-asset trading, on the other hand, is expressly regulated to be available to all international investors. An investor must meet the following requirements in order to become a Bappebti certified Crypto-Asset Physical Trader:

  • have at least IDR 50 billion in paid-up capital;
  • retain a minimum of IDR 40 billion in equity;
  • have acquired a PSE accreditation (Electronic System Provider or Penyelenggara Sistem Elektronik) from the Ministry of Communication and IT for their system;
  • having a business strategy in place for the next 24 months, as well as financial projections;
  • Bappebti’s system requirements must be met.

How Can Cekindo Help?

Setting up a business in Indonesia can be lucrative, but it also presents several hurdles. Cekindo registers your company with the least hassle, while you focus on the core business aspect of your company. Cekindo conducts due diligence and market research to rule out any loopholes. We also provide legal consultation and ensure that you stay on top of legal compliances, along with helping you with the acquisition of business licenses.

To know more about how Cekindo’s solutions can help you make investments in Indonesia, please fill out the form below or talk to an expert on our chatbot.

Verified by

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

Frequently Asked Questions

    Indonesian Company Law establishes a two-tier governance system with Directors managing day-to-day operations and representing the company, while the Board of Commissioners supervises and advises them. The articles of association may empower board of Commissioners to provide consent or assistance to Directors for specific legal acts.

    According to Presidential Regulation No. 10/2021 and the amended version, all businesses are open for domestic and foreign investment with these limitations and classifications:

    • Eight businesses are closed to foreign investment and may be operated by the central government.
    • Designated business sectors or joint ventures with cooperatives (koperasi) and micro, small, and medium enterprises
    • Open businesses are subject to specific conditions, such as those that are exclusively available to 100% local investors, those with restricted foreign shareholding, and investments requiring special licenses

    Certain sectors are closed to foreign investment, including narcotics cultivation, gambling, and environmental conservation activities.

    The procedures for (voluntarily) liquidation typically involve the following steps:

    • Conduct a general shareholder meeting to approve the liquidation and the liquidator’s nomination
    • Notify the Ministry of Law and Human Rights as well as the creditors of the liquidation and the distribution plan for the assets by newspaper notice
    • All business licenses and tax numbers should be canceled or revoked; the tax office will conduct a tax audit to revoke the tax number
    • Make sure creditors are paid and that any liquidation funds are distributed to shareholders (if any)
    • Conduct a general meeting of shareholders to approve the liquidator’s discharge and acquittal
    • Notify the Ministry of Law and Human Rights of the liquidation’s outcome. After receiving the notification, the Ministry of Law and Human Rights will deregister the company’s status as a legal entity and remove its name from the Company Registry
    • Release the liquidation’s outcome in a newspaper

    Completing the liquidation process can take around two years.

    In Indonesia, employment arrangements are categorized into temporary employment agreements (PKWT) and permanent employment agreements (PKWTT). Temporary contracts are for short-term, seasonal, or experimental work, while permanent contracts are for continuous employment.

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The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.