Indonesia’s National Digital Asset Exchange to Reform Crypto Sector after FTX Crisis
Considering the collapse of the FTX exchange, the Indonesian government plans to revamp the entire crypto sector to limit the risk their citizens are exposed to when it comes to digital asset trading and investing.
Being the fourth most populous country in the world with a population of over 277 million, Indonesia aims to safeguard people from the risk associated with the crypto space. For this reason, this southeast Asian country plans to introduce strict regulation on trades conducted on crypto assets.
Indonesia’s Key Plans on Crypto Regulations
According to official reports, Indonesia plans to introduce a crypto bourse that is backed by the government. This course will act as the main platform that allows Indonesians to trade in various cryptos. Moreover, all the rules and regulations are implemented by the government’s Trading Regulatory Agency.
The difficulty faced by the national regulatory agency is regarding the benchmark of the crypto bourse. Noordiatmoko is the agency head who leads the planning process. He said that the other state-backed agencies will take the initiative to handle the custody and clearing of the digital assets. As a result, they could avoid potential frauds that happened at the FTX.
The blueprint of the crypto bourse is very similar to the functioning of the traditional stock market. In this case, the different sections like trading, custody, and clearing are conducted through the official channels. In addition, the global regulation of crypto bourses is also developed based on government regulations.
All these plans are to create a well-structured platform for traders and investors to conduct crypto-based services safely. Thereby preventing unfortunate events like the FTX crash that wiped out investors’ assets worth billions of U.S dollars.
Government’s New Target
This is not the first time that the Indonesian government plans to implement a crypto bourse based on the stock market model. Earlier, Zulkifli Hasan, minister for trade said that the crypto-stock exchange will be launched before June 2023. However, he also added that they are not in a rush to launch it.
The very first plan was to launch this crypto bourse before the end of 2021, unfortunately, the plan didn’t go through due to foreseen reasons. The faster rate of crypto adoption in Indonesia also played a crucial role in the execution of the crypto regulations.
As per the latest reports, the new Indonesian crypto-stock exchange is to be established by the mid of 2023. There are around two dozen regional crypto exchanges in Indonesia and all these exchanges must be integrated into the national bourse. Noordiatmoko said that the existing crypto exchanges will continue functioning as government-regulated brokers. Moreover, he added that the new exchange will run as a private-sector company.
Based on the reports by Chainalysis, Indonesia has an overall crypto index rank of 20. Which, this country ranked 13th based on the value of decentralized finance(DeFi) received.
Final Thoughts
A very large number of traders from Indonesia were involved in crypto trading during the bull market of 2020-21. Most crypto activities executed by Indonesians were mainly based on speculative trading. This form of trading involves high risk and can result in the entire loss of investments.
Following the absence of regulations that are associated with the crypto industry, the government came up with the initiative to regulate overall activities involved around cryptocurrencies, NFTs, and other digital assets. Moreover, the regulations will allow users to invest or trade on crypto assets that qualify the government regulations.
The crypto industry is on its path to recovery from the negative impact caused by the FTX crash. Foreseeing such unfortunate incidents Indonesia plans its crypto-stock exchange that provides its citizen’s opportunities to trade and invests in crypto and other digital assets approved by government regulations. Moreover, official monitoring helps to protect users’ assets and funds from fraudulent activities.
