Indonesia: New Legislation Recognizes Crypto as Trading Commodity

Indonesia has introduced new legislation that recognizes Bitcoin (BTC) as a trading commodity, Asia-oriented news outlet KrASIA reported on Feb. 15.

Indonesia’s Commodity Futures Trading Regulatory Agency, also known as Bappebti, initially signed a decree to make cryptocurrency a commodity future legally tradable on stock exchanges last June. The agency then stated that the Indonesian government would soon release corresponding legislation regulating currency exchange companies, taxation, and other related issues.

Today, Bappebti reportedly approved regulation No. 5/2019 that recognizes Bitcoin and other digital currencies as a trading commodity. The legislation thus gives legal certainty to cryptocurrency exchanges that have been already operating in the country.

The new policy reportedly outlines a set of requirements in regard to any cryptocurrency circulating in Indonesia. Specifically, cryptocurrencies have to comply with risk assessment, anti-money laundering (AML) and combating the financing of terrorism  (CFT) requirements. The policy also stipulates that cryptocurrency traders must keep transaction histories for at least five years and have a server located inside the country.

Head of Bappepti Indrasari Wisnu Wardhana reportedly said that with the introduction of the new legislation, the agency wants to “give protection to people who want to invest in crypto assets so that they aren’t cheated by fraudulent sellers.”

At the same time, Head of Bank of Indonesia (BI) Payment System Policy Department Onny Widjanarko stressed that "BI still prohibits Bitcoin or crypto as a means of payment.[...] Commodity is not an area of ​​BI, but we are concerned about the above."

Bitcoin brokers in Indonesia have become displeased with regulators following new capital requirements that were introduced last October. The new rules oblige brokers to have at least $70 million to launch futures trading.