It didn’t take long for cryptocurrency traders in Indonesia to start a protest against new crypto laws just reported two days ago. The move isn’t surprising, given that the government now expects crypto asset traders to have at least $70.13 million (one trillion rupiah) in capital and an additional $5 million on deposit. While regulations are meant to help the industry grow, it appears that the opposite might happen in this case.
Crypto traders have begun to argue that the new rules will prevent the young market from developing. While crypto still cannot be used for payments – they’re banned by the central bank for that purpose- trading of blockchain-backed assets is not against the law.
The CEO of the Indodax digital asset trading company, Oscar Darmawan, told Reuters that the “very large” minimum capital level is much higher than what a rural bank is charged when it seeks an operating license, and that the up-front capital is much higher than what is required of a conventional broker of other commodities. Those brokers are only required to have paid-up capital of $176,991 (2.5 billion rupiah). He asserts that regulations are need to support the industry, but that they “should not kill [the] industry.”
The new capital requirements caught everyone off-guard and are going to cause huge obstacles for FinTech innovation in the country. The CEO of the Tokocrypto trading firm, Teguh Kurniawan Harmanda, adds that no one had been given prior notice of the new rules, and that the subject never came up during industry consultations that had been held by the government prior to the publication of the regulations.
In addition to the outrageous money the companies would have to have available, traders will also need to have a full client support division, have at least one employee who is a certified security practitioner, maintain historical transaction data for at least five years and maintain a computer server inside the country.
Crypto futures trading has been allowed since last October. It was introduced as a means to provide hedging tools that could protect investors from crypto price fluctuations; however, to date, there have been no futures transactions for any digital asset.
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