As cryptocurrencies become more prevalent globally, different countries are still honing their individual approaches to crypto regulation and oversight. Indonesia is among those countries to have evolved a relatively well-defined stance towards crypto assets and is considered reasonably open to blockchain technology. Despite initial hesitance, new regulations have paved the way for citizens to invest in and trade crypto.
Indonesia recently made headlines in the crypto space when the government revealed its plans to introduce a crypto tax for traders. Indonesia is also home to several crypto exchanges, including Indodax and the Binance-backed platform Tokocrypto.
This beginner's guide will provide an overview of crypto’s legal status, key regulations, the extent of crypto adoption, and merchants’ readiness to accept crypto in Indonesia.
Is Cryptocurrency Legal in Indonesia?
Yes, cryptocurrency is legal in Indonesia. Cryptocurrencies were legalized in September 2018, when the Ministry of Trade approved the trading of Bitcoin (BTC) and crypto assets as commodities. The Futures Exchange Supervisory Board (Bappebti) is in charge of cryptocurrency and blockchain regulation in the country.
In 2020, crypto exchange registration requirements came into force in Indonesia, following Bappebti's legal framework for crypto assets that had been initiated the previous year. The agency justified the measure by citing the need to protect Indonesian traders from fraudulent platforms.
Although cryptocurrencies are legal in Indonesia, there are still major hurdles for crypto organizations and the local crypto community. The central bank of Indonesia does not recognize cryptocurrency as a means of payment, which presents a major problem for widespread crypto adoption. Moreover, many banks are reluctant to open accounts related to crypto trading and there is still a lot of misinformation circulating regarding the nature of cryptocurrencies.
Despite these problems, there has been notable progress made towards establishing a comprehensive legal framework that will ensure the crypto industry flourishes in Indonesia.
Key Cryptocurrency Regulations in Indonesia
Bappebti Regulation No. 7 (2020): Bappebti issues a list of 229 crypto assets that can legally be traded on exchanges.
Bappebti Regulation No. 5 (2019): Bappebti defines cryptocurrency as a commodity and provides clarity regarding the regulatory requirements for cryptocurrency exchanges in Indonesia.
Crypto’s Legal and Regulatory Status in Indonesia
- Cryptocurrency is legal in Indonesia and is defined as a commodity
- The Futures Exchange Supervisory Board regulates crypto in the country
- Cryptocurrencies cannot be used as legal tender in Indonesia
- Indonesia implements strict anti-money laundering laws
- The Futures Exchange Supervisory Board oversees licensing for crypto exchanges
Are Crypto Assets Taxed in Indonesia?
There are no taxes in Indonesia for those that trade cryptocurrency; for the time being, only crypto-related businesses, such as exchanges, pay taxes in accordance with current regulations. However, Indonesia is now considering plans to introduce a crypto tax, due to its growing popularity.
Taxes on Crypto Mining in Indonesia
As of May 2021, there are no clear tax regulations for mining cryptocurrency in Indonesia.
Who Accepts Crypto in Indonesia?
The current status of cryptocurrency as a commodity in Indonesia has limited the adoption of cryptocurrency by merchants. However, a limited selection of businesses are starting to accept crypto payments, among them:
- ESO Trans Digital: ESO Trans Digital is a platform that uses blockchain and NFC technology to facilitate payments and transactions. Users can pay for goods and services with crypto via QR Codes and other payment options.
- Nobi: Nobi is a blockchain savings platform that offers users interest on their cryptocurrencies. Users can deposit, save and stake cryptocurrencies for rewards on its mobile applications.
- BCS technology: BCS technology is a blockchain consulting company that builds projects. The company accepts crypto payments for its services.
There are some who anticipate that the government will eventually change the classification of cryptocurrencies from commodities to digital assets. This would hasten the adoption of cryptocurrency as a form of payment by merchants.
Where Can You Buy Crypto in Indonesia?
The legal status of cryptocurrency means that Indonesians can buy crypto assets on any registered exchange. Here are some of the platforms you can use to buy Bitcoin and other cryptocurrencies in Indonesia:
Indodax: Indodax is one of the largest crypto exchanges in Indonesia. It has a high-profile local presence and offers crypto services to Indonesian citizens looking to buy, sell, and trade crypto.
TokoCrypto: TokoCrypto is an exchange that advertises itself as one of the easiest-to-use platforms for crypto traders in Indonesia. It is backed by Binance and offers a fiat on-ramp that allows users to convert between Indonesia rupiah and supported cryptocurrencies.
Binance: Although Binance is not registered with Bappebti, Indonesian citizens can still access the popular crypto exchange. Binance offers a wide range of features that include buying, trading and staking cryptocurrencies.
Bitcoin ATMs: As of May 2021, Indonesia has only one Bitcoin ATM, which is located in the country's capital, Jakarta. However, it is important to note that using a Bitcoin ATM involves high transaction fees of roughly 5-10%.