Business 6 June 2018

Gerald Fenech

Indonesia accepts cryptocurrencies as trading commodities

In a move that will propel the country forward in the cryptocurrency space, Indonesia has announced that domestic trading exchanges can accept cryptocurrencies as commodities.

The announcement was made by the Trade Ministry’s Futures Exchange Supervisory Board (Bappebti), which specified that cryptocurrencies could be listed on exchanges or bourses as commodities, the Jakarsta Post reported. However, this decision could put the board on a collision course with Bank Indonesia, the country’s central bank, which has repeatedly stated that it does not recognize these currencies as payment instruments.

Dharma Yoga, head of the Bappebti market supervision and development bureau, was quoted saying: “The Bappebti head has signed a decree to make cryptocurrency a commodity that could be traded at the bourse.”

This decree should open the market to a substantial number of Indonesia’s 280 million citizens, making the country—which has the fourth largest population in the world—an ideal test case for the continued application of cryptocurrencies.

Speaking to konta.co.id, Dharma revealed that the decision had not been taken lightly and was only implemented after conducting a study on the matter during the last four months. The study concluded that cryptocurrencies would be better used if they were classed as commodities and this allowed them to be traded on the stock exchange.

Dharma also announced that the government would soon be issuing some supporting regulation covering several important issues. These include the regulation of crypto exchange companies, taxation, the prevention of money laundering as well as financing of terrorist activities.

The government official said that the regulations would also involve a wide number of institutions such as the Bank of Indonesia, the Financial Services Authority, the Taxation Directorate General, the Financial Transaction Reports and Analysis Centre as well as the National Police’s Densus 88 counterterrorism squad.

Dharma added that in line with the government’s efforts to issue the regulation, Bappebti also called on existing crypto bourses like Indodax, as well as the domestic crypto community, to submit their proposals on the product specification and the trading procedure.

The product specification will, among others, include information about the type of cryptocurrencies and size of the trading instrument, while the procedure will include the trading hours and dispute settlement mechanism, he added.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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