Indonesia’s Crypto Transactions Skyrocket to $1.92B in February: Regulator Reports

Indonesia has experienced an impressive surge in crypto transactions, reaching Indonesian Rupiah 30 trillion ($1.92 billion) in February, according to the country’s crypto regulator. The number of registered cryptocurrency investors in the country also hit 19 million last month, indicating an increase of 170,000 users from January. 

The Commodity Futures Trading Supervisory Agency (Bappebti) attributes this growth to positive market sentiments fueled by Bitcoin’s (BTC) price rally and the surge in altcoins, tokens other than BTC. Tirta Karma Senjaya, a representative from Bappebti, highlighted that despite the downward trend in 2022 and 2023, a rebound in 2024 is expected. Indonesia could reach or exceed the transaction volume achieved during the 2021 bull run, which amounted to $51.28B. Sanjaya added that the upcoming Bitcoin halving will serve as a key catalyst for this expected resurgence.

Bappebti said eliminating or reducing cryptocurrency taxes would be a favorable approach to achieving the target of increased crypto transactions. Crypto transactions are currently taxed at 0.10% for income tax and 0.11% for Value Added Tax (VAT) on users, with exchanges taxed at 0.02% per transaction for the crypto bourse, clearing house, and depository.

Furthermore, the transfer of crypto oversight to the Financial Services Authority (OJK) in January next year could result in significant changes, such as reclassifying cryptocurrencies as securities and revising VAT policies.

During a recent Reku exchange event, Tirta said:

“I’ve previously said that this industry (crypto) is still in its embryonic stage, so imposing heavy taxes might kill the industry.”

Indonesia Issues New Crypto Regulations

The OJK issued new regulations last week to implement technological innovation in the financial sector. They will apply to crypto from January 2025. These rules will guide insurance companies, banks, and other entities in the financial industry on how to leverage new technologies.

The regulations discuss how innovations in the finance sector impact different financial services and products and how firms operate digitally. Moreover, they include guidelines for safeguarding customers, establishing testing environments (sandboxes) for new tech, and reporting the outcomes of tests. Importantly, they encompass activities related to digital financial assets, including cryptocurrencies.

These regulations don’t dive into the details but lay the groundwork for handling crypto developments in finance. OJK is working with the current crypto regulator, Bappebti, and Bank Indonesia. Together, they are creating a transition team to manage the shift in the supervision of digital financial assets.