The Financial Services Authority (OJK) warned that Indonesia bans financial firms from trading cryptocurrency. The regulators also warned that people must understand the volatility and risks of cryptocurrency before investing in it.
Cryptocurrency in Indonesia
In a statement posted on Instagram, the regulators said, “OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading.”
They also added, “Please be aware of allegations of Ponzi scheme scams in crypto investments.”
Furthermore, the Banks of Thailand and Singapore have issued similar warnings.
Nevertheless, crypto assets are soaring in Indonesia, with transactions reaching 859 trillion rupiahs in 2021.
However, as Indonesia does allow sales of crypto assets in the commodities exchange, trading is under the supervision of the Trade Ministry and the Commodity Future Trading Regulatory Agency.
Ministry officials are currently setting up a separate bourse of digital assets. The bourse is, called the Digital Futures Exchange, will launch in the first quarter.
Cryptocurrency users in Indonesia
According to the Indonesia Stock Exchange data, there are 2.7 million investors in Indonesia.
Furthermore, the country is the seventh-largest crypto user base with 7.4 million cryptocurrency owners.
Nevertheless, while the OJK does not regulate digital assets, Indonesia’s religious council announced the use of crypto as unlawful. In most circumstances, the warning is for Muslims in Indonesia.
Is cryptocurrency being banned globally?
Countries like China, Qatar, Oman, Morocco, Bangladesh, Tunisia, Egypt, and Iraq have banned cryptocurrency.
Cryptocurrencies are not a form of legal payment in Indonesia. Nevertheless, there are 229 cryptocurrencies allowed in the country.
In recent news, the Central Bank of Russia also proposed to ban cryptocurrency. While Russia cannot use cryptocurrency, it will still own it.
Furthermore, Russia raised claims that cryptocurrency has risks associated with criminal activities.
Cryptocurrency in Indonesia in 2021
According to a study by Chainalysis, Indonesia was the top crypto hotspot globally in 2021.
Indonesia’s online crypto engagement soared last year by 1,772% as people looked for more information about digital assets.
Lastly,
As Indonesia bans financial firms from trading in cryptocurrency, the Digital Futures Exchange should regulate the market.
With the Futures Exchange launching in the first quarter of 2022, regulators can effectively oversee the crypto industry.
Also Read – Russia to impose a ban on Cryptocurrency Trading and Mining