Indonesia Will Not Ban Crypto Like China, But Will Tighten Regulations
Indonesia is not influenced by China’s example of imposing a total ban on cryptocurrencies. The country will will however, limit itself to ensure they are not used in illegal activities. The statement comes after local crypto exchanges registered a serious increase in turnover this year.
Indonesia to Tighten Crypto Regulations
According to the country’s Minister of Trade, Muhammad Lufti, the Indonesian government will not follow in the footsteps of China, which has confirmed a ban on all crypto transactions. The official added, however, that the government is looking into how to make them less prone to being used in illegal financial activities. Luthfi said:
“We don’t prohibit it, but we will tighten the regulations.”
Cryptocurrencies are currently regarded as assets and commodities in Indonesia. Their legal treatment allows residents of the nation to trade the digital coins, but using them as a means of payment is not permitted.
The People’s Bank of China stated that cryptocurrency transactions are illegal, echoing previously imposed restrictions. All related financial activities, including crypto trading, token sales, and transactions with virtual currency derivatives are also banned. The announcement, which affected cryptocurrency markets, comes after a months-long crackdown on bitcoin mining and trading across the country.
Indonesian Crypto Trading Surges
China’s reiterated firm stance on decentralized money affected crypto prices in Indonesia, too. Bitcoin (BTC) fell 7.4% on the country’s largest exchange, Indodax, to 595 million Indonesian rupiah (below $41,000) right after the PBOC notice on Friday. The price of the leading cryptocurrency by market cap has since recovered to 609 million rupiah per coin ($42,080 at the time of writing).
According to the reports, Indonesian crypto trade has been flourishing in the past year and a half. Transactions on 13 domestic exchanges authorized by the Futures Exchange Supervisory Board have increased by 40% in the first five months of 2021. During 2020, the transaction volume reached 65 trillion rupiah ($4.5 billion), the quoted data shows.
The number of people involved in trading exceeded 6.5 million in May, from 4 million at the end of last year. Luno Indonesia, another major exchange operating in the country, expressed confidence it could double or even triple its customer base from the current 700,000 users.
