Regulators in Indonesia have finally recognized Bitcoin and other cryptocurrencies as commodities, thus providing legal backing for trading virtual currencies.
Consequently, cryptocurrency exchanges in the country now have a set of requirements that must be satisfied before being allowed to operate.
Requirements For Bitcoin Exchanges In Indonesia
The Indonesian Trade Ministry Futures Exchange Supervisory Board (Bappebti) issued regulation No.5/2019 which includes regulations for cryptocurrency exchanges, as well as, a formal recognition of cryptocurrencies as commodities. Based on the new ruling, virtual currency trading is now legalized in the country.
As part of the new set of laws, Bitcoin exchanges must employ the services of IT security experts and keep records of their transactions for a minimum of five years. Also, one of their servers must be domiciled in the country and they must have clearly defined organizational structures with departments like legal, audit, client support, IT, etc.
Speaking to Hukumonline, Bappebti chief, Indrasari Wisnu Wardhana, highlighted the need for these regulations saying:
We want to give protection to people who want to invest in crypto assets so that they aren’t cheated by fraudulent sellers.
These regulations form part of a larger set of rules for cryptocurrency commodity trading both in the spot and futures trading market.
Cryptocurrency Payments Still Prohibited
While these new laws provide legal certainty for cryptocurrency exchanges, such services have been operational in the country since as early as 2014. Despite the formal recognition given to virtual currencies as commodities, the ban on cryptocurrency payment is still in effect.
Onny Widjanarko, a top executive of Indonesia’s apex bank (BI) said that the bank was part of the deliberations that led to the recognition of cryptos as commodities. For Widjanarko, the decision by Bappebti does not negate its ruling against cryptocurrencies as its mandate is the protection of rupiah sovereignty and monopoly within the country.
Speaking to CNBC Indonesia on Friday (February 15, 2019), Widjanarko said:
BI still prohibits bitcoin or crypto as a means of payment. Commodities regulation is not an area of concern for the BI.