Cryptocurrencies To Be Regulated As Commodities In Indonesia

News, Regulation | June 5, 2018 By:

Indonesia’s Trade Ministry Futures Exchange Supervisory Board (Bappebti) has signed a decree to make cryptocurrency a commodity that can be subject to futures trading.

Dharma Yoga, Bappebti’s market supervision chief, said that the agency decided to allow cryptocurreny to trade as a commodity after the board conducted a study on the matter in the last four months. He said that the Indonesian government will soon adopt additional regulations that will directly address issues revolving around currency exchange companies, taxation, money laundering, and terrorism financing.

“The issuance of the regulation would involve a number of institutions like BI, the Financial Services Authority (OJK), the Taxation Directorate General, the Financial Transaction Reports and Analysis Centre (PPATK) and the National Police’s Densus 88 counterterrorism squad,” Yoga said.

Yoga added that all cryptocurrency exchanges will be expected to submit proposals for product specification and trading procedure. The product specification will include information about type of cryptocurrencies and tick size of the trading instrument, while the procedure will include the trading hours and dispute settlement mechanism.

Bitcoin has been declared an illegal payment and transaction instrument in Indonesia. Bank Indonesia has repeatedly issued warnings against selling, buying or trading cryptocurrencies. The central bank said the ownership of cryptocurrencies is high risk and prone to speculation because there is no authority who takes responsibility. There is no official administrator and there is no underlying asset as the basis for the price.

In a statement on Monday, Wimboh Santoso, Indonesia’s Financial Service Authority (OJK) board of commissioner chairman, asserted that the financial industry is barred from actively participating in cryptocurrency transactions.

“Cryptocurrencies are not allowed, especially if it acts as a commodity,” said Wimboh at the Bank of Indonesia office complex, adding that the ban corresponds to the existing regulations which mentions that cryptocurrencies are not considered to be a product of the financial services industry, which is why it is barred to be traded as a commodity.

Wimboh also said that the OJK has not engaged in communication with the Bappebti, even though he firmly maintains that financial trade industries are bound by regulations that bar them from conducting trade with cryptocurrencies.