6 Reasons Why Crypto Companies Can’t Ignore Indonesia
Thursday, 10 October 2024Join +6,000 readers who get weekly insights to the Indonesian crypto market
TL;DR
- Indonesia has a large population that does not use banks.
- This, combined with the rapidly increasing adoption of cryptocurrency, makes Indonesia a potentially lucrative market.
- The young population is technologically adept, which further increases the likelihood of cryptocurrency adoption.
- Indonesia also has a rapidly growing financial technology sector which offers opportunities for cryptocurrency companies to partner with existing businesses.
- Finally, the government of Indonesia supports the use of cryptocurrency by providing clear regulations.
Indonesia, with its population of nearly 280 million, is quickly becoming a key player in the global crypto landscape. Despite this, many crypto businesses still overlook the immense opportunities the country offers. Indonesia’s large unbanked population, skyrocketing crypto adoption, and progressive regulatory landscape make it fertile ground for crypto ventures. For businesses expanding in Southeast Asia, Indonesia isn’t just an option—it should be a priority.
In this article, we’ll explore why Indonesia is emerging as a critical market for the crypto industry and how each factor contributes to a dynamic ecosystem for growth.
Indonesia’s Vast Unbanked Population
Indonesia’s population presents a unique opportunity because a significant portion still lacks access to formal banking services. With nearly 98 million unbanked adults, Indonesia has one of the largest unbanked populations in the world (World Bank). For crypto companies, this underserved group represents an opportunity to provide financial services without relying on legacy banking systems.
As smartphone penetration increases, millions of Indonesians are bypassing traditional banks and moving directly to digital solutions. Crypto businesses can step in by offering mobile wallets, peer-to-peer payments, and decentralized finance (DeFi) services, effectively bridging the gap to financial inclusion. As digital financial tools become more common, companies that offer seamless, mobile-first services will be well-positioned to meet this demand.
Read more: Indonesia’s Crypto Regulation A Full Guide for Companies
Explosive Growth in Crypto Adoption
The crypto user base has skyrocketed from 9.9 million in 2021 to an astonishing 20.9 million by 2024. According to Chainalysis, Indonesia has climbed from seventh to third place globally for crypto adoption, reflecting the highest annual growth rate among countries, nearing an impressive 200%.
This rapid expansion is driven by the need for more accessible financial solutions, particularly among the unbanked population. As traditional banking systems fall short, crypto provides a flexible alternative.
For businesses entering the market now, the demand for digital financial tools continues to rise. By establishing a foothold, companies can take advantage of the growing crypto adoption and position themselves as early leaders in a booming market.
Read more: Indonesia Ranks 3rd in Global Crypto Adoption 2024
Indonesia’s Young, Tech-Savvy Population
A key driver of Indonesia’s crypto growth is its youthful, tech-savvy population. With 79.5% internet penetration in 2024, Millennials and Generation Z are embracing new financial technologies. Millennials (aged 28-43) have an internet penetration rate of 93.17%, and Gen Z (aged 12-27) is close behind at 87.02%.
These digital natives prefer mobile-first platforms for payments, investments, and financial management. For crypto businesses, this demographic is crucial. As they become more financially independent, the demand for innovative crypto solutions will increase. Companies that cater to this audience with user-friendly platforms are likely to thrive.
Indonesia’s Booming Fintech Sector
Indonesia’s fintech ecosystem is expanding rapidly. In 2022, e-commerce transactions reached $51.9 billion, while e-money transactions grew 30.84% to Rp399.6 trillion, driven by platforms like GoPay, OVO, and DANA. The government’s efforts to standardize QR payments, totaling IDR 98.5 trillion, have further accelerated the shift to digital payments (BCG Report, 2023).
This growing fintech sector offers a fertile environment for crypto businesses. As digital payments become the norm, DeFi services, crypto-backed lending, and blockchain-based payments can integrate seamlessly into the existing fintech infrastructure. The opportunity for collaboration and expansion is significant as Indonesia’s digital transformation continues.
Progressive Regulations and Government Support
Indonesia offers a clear legal framework for cryptocurrencies, with the Commodity Futures Trading Regulatory Agency (BAPPEBTI) currently regulating them as tradable commodities, providing a stable environment for businesses. By 2025, the Financial Services Authority (OJK) will take over market oversight, potentially introducing new classifications and compliance requirements, making it crucial for crypto companies to adapt.
This regulatory certainty encourages long-term investment, while the government’s openness to blockchain innovation, particularly in finance and trade, creates a strong foundation for business growth in Indonesia’s expanding crypto market.
Local Partnerships as a Catalyst for Growth
Building strong local partnerships is essential for successfully entering the Indonesian market. International companies like Bybit and Tezos have partnered with local entities such as Indonesia Crypto Network (ICN) to gain traction. These partnerships provide critical insights into local consumer preferences and regulatory landscapes, enabling faster, more efficient market entry. By aligning with trusted local players, crypto businesses can accelerate growth and build brand recognition more effectively, ensuring a smooth and quick market entry and expansion.
Read more: 5 Ways to Get Your Crypto Projects Listed in Indonesian Exchanges
Conclusion
Indonesia is not just an emerging market—it is on the path to becoming a major hub for the global crypto industry. From its vast unbanked population to its progressive regulatory framework, all the conditions for growth are in place. The country’s rising crypto adoption, young tech-savvy population, and thriving fintech ecosystem create a prime environment for crypto businesses to succeed.
For companies expanding into Southeast Asia, Indonesia offers unmatched potential, but the time to act is now, before the market saturates. Indonesia Crypto Network (ICN) can help you navigate the complexities of the market, tap into its dynamic ecosystem, and build a foundation for long-term success. Consult with ICN today by filling out our form to get ahead of competitors and secure your foothold in this thriving market.