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Crypto Regulations in Indonesia: Similarities and Differences with Other Southeast Asian Countries

Friday, 17 February 2023

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As a region with many emerging markets, a common trend among Southeast Asian countries is for regulations to frequently shift and evolve. As a relatively new industry, crypto is no exception. Below, we’ll outline a general idea of the current crypto regulatory landscape in many large Southeast Asian countries; namely, Indonesia, Singapore, Malaysia, Vietnam, and Thailand.

Crypto regulations in Indonesia

In Indonesia, crypto trading is governed by the Commodity Futures Trading Supervisory Body (Bappebti) through Regulation No. 5 of 2019. In essence, it allows companies who have registered with the government to buy and sell cryptocurrencies which have also been approved by the government as commodities.

As of 2022, there are 28 exchanges and 383 assets permitted to trade in Indonesia. Binance is still missing from the list, meaning that the large crypto exchange cannot operate in Indonesia yet. Traders are also required to undergo a strict Know-Your-Customer (KYC) process in their respective exchanges to prevent fraud and illegal activities. Finally, crypto is only permitted to be traded as commodities, not used as payment methods.

The new regulation of RUU P2SK that was published recently states that the supervisory body for crypto transactions will be shifted from CoFTRA to Otoritas Jasa Keuangan (OJK) – equivalent to US SEC.

Crypto regulations in Singapore

Since 2020, Singapore has used the Payment Services Act to regulate the trading of cryptocurrencies. It governs in great detail about how companies can earn licenses to trade crypto as well as the guidelines they need to follow while doing so. For example, like Indonesia, crypto companies in Singapore also need to verify customer identities and transactions to avoid laundering and illegal activities.

A major difference is that crypto is permitted as a payment method in Singapore. Unlike Indonesia, selected merchants from precious metals to food and beverages already accept crypto as a payment method. Signs also point to a rise in this trend, with 37% of Singaporeans either already or interested in paying with cryptocurrencies.

Crypto regulations in Malaysia

In Malaysia, crypto trading is regulated under the Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019. In practice, crypto is treated very similarly to how it is in Indonesia. Cryptocurrencies are regarded as securities, meaning they are permitted to be traded but not considered legal tender for payment. This makes Malaysia an excellent benchmark to measure the government’s openness to crypto compared to Indonesia, and it’s worth keeping an eye on how the crypto landscape there evolves.

Crypto regulations in Vietnam

As of 2021, the Vietnamese government has not recognized cryptocurrencies as either investment commodities or means of payment. While it is not illegal to own crypto in Vietnam – an estimated 1 million Vietnamese citizens already do – there are not yet any regulations governing crypto as a commodity and the law already expressly prohibits its use as payment.

However, there are signals that might change. Vietnam’s Ministry of Finance has already instructed a research group to look into cryptocurrencies and how the government might regulate them to protect crypto investors and traders in the country.

Crypto regulations in Thailand

Buying and selling crypto was previously not permitted in Thailand, although the ban was lifted in 2014. In Thailand, cryptocurrencies are regulated by the Royal Decree on Digital Asset Business, which took effect on May 14, 2018. Similar to Indonesia, it allows digital assets to be issued, traded, and exchanged through operators licensed by the Thai Securities and Exchange Commission (SEC).

In terms of payment, the Thai government has repeatedly stressed its intent to not allow crypto as payments, in the interest of protecting its financial stability. As of 2022, it is on the path to regulating it further and outright banning digital asset operators from using crypto as a means of payment for goods and services.

The future of crypto in Indonesia

Indonesia has comparatively solid crypto regulations and a prospective market with very strong fundamentals. This makes Indonesia an essential step for crypto adoption in Southeast Asia.

Companies like Indonesia Crypto Network (ICN) that specialize in awareness, penetration, and adoption for blockchain companies/projects are helping to bring clarity to Indonesia for both users and projects.

Users in Indonesia and the region are increasingly looking towards ICN channels and similar trusted sources for reliable and actionable information that can deliver value. With the number of potential solutions for Indonesia, local sensibilities will continue to be required to engage and activate Indonesian users.

Felita Setiawan

COO @ Indonesia Crypto Network

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