Indonesia Finally Launches its Crypto Exchange and Clearing House

The Indonesian government has officially launched its long-awaited national cryptocurrency exchange. According to a statement from the country’s Commodity Futures Trading Supervisory Agency (CFTSA) Bappebti, the platform began functioning a week ago. It will be the only platform in the country where the legal exchange of digital assets is allowed.

On July 20 2023, Bappebti confirmed the exchange’s opening, setting a new course for the country’s digital asset landscape, marking a significant milestone in the nation’s financial history. Bappebti decree accompanies the exchange and introduces a Futures Clearing House, a necessary mediator between a buyer and seller that will ensure the transaction goes smoothly.

The regulatory framework aims to balance international market developments and domestic transactions. The exchange granted licensed traders a one-month window to join, encouraging participation from the existing crypto community in Indonesia.

The Delays in the Project

The government had initially planned to start operations by December 2021. After facing delays, the date was pushed from the original end-of-2022 launch to June 2023. The postponement was attributed to the meticulous review process aimed at identifying potential participants for the exchange. In September 2022, the CEO of Tokokrypto Pang Hue Kai, one of 25 licensed crypto exchanges in the country, partly owned by Binance, called the project a catalyst for the Indonesian crypto ecosystem.

On September 1 2022, at the NXC International Summit 2022 in Bali, the Deputy Minister of Indonesia’s Ministry of Trade, Jerry Sambuaga, confirmed that the country still intends to launch the crypto bourse project; however, they have encountered delays due to additional preparations. Sambuaga noted that they will make sure that every requirement, procedure and necessary steps will have been taken.

Three weeks later, the Deputy Minister of Indonesia’s Ministry of Trade, Jerry Sambuaga, emphasised that most crypto exchange leadership should comprise Indonesian citizens and be domiciled in Indonesia. Sambuaga’s letter suggested several policy changes in response to the exciting year for the development of physical trading of crypto assets in Indonesia. Sambuaga also proposed that crypto firms have a minimum capital requirement and that user funds be stored in third-party financial institutions or futures clearing houses.

According to Indonesia’s Commodity Futures Trading Regulatory Agency acting head Diddid Noordiatmoko, the rule is aimed at stopping leadership at crypto firms from running out of the country when problems arise. However, some reports suggested that the proposed changes to the country’s crypto policy may have been influenced by the legal battle involving Terra Co-Founder Do Kwon. A South Korean national left Indonesia for Singapore in April despite a warrant for arrest which was issued for him by officials and Interpol placing Kwon on their Red Notice list.

On February 2 2023, the country’s Trade Minister Zulkifli Hasan noted that all active crypto exchanges with national registration could join the exchange. The Minister of Trade confirmed that they aim to roll out the federal crypto exchange by June this year, and the government was reviewing which firms meet their criteria to become part of the exchange. According to Zulkifli, five active crypto exchanges are registered with Indonesia’s regulators, and the crypto exchange ministry could encompass all of them.

Experts from Coin insider mentioned that the ministry’s exchange would act as a clearing house and custodian in the local market, while the exchanges facilitate all trades within the nation. The public was urged to be patient with the national crypto exchange by the Trade Minister.

Hasan said: “Let us not rush because things will get messy if it is not ready. The government does not want this to massively take a ton on the public because people do not know much about crypto trading.”

On July 12, 2023, Bappebti Head Diddid Noordiatmoko confirmed that crypto exchange preparations were made before the launch. They agreed on the stock exchange rules, and the know-your-customer (KYC) process has been regulated.

Noordiatmoko said:

“Trading on the exchange would be offered through an integrated application, which the CFTRA has already tested. Bappebti wants them to be local but still abreast of international market developments, including the question of prices, provided Bappebti approves them.”

The crypto investment in Indonesia has seen considerable growth, and celebrities and influencers have helped increase interest in digital assets. Between 2020-2022, 4% of the country’s population invested in crypto. Bappebti emphasised that crypto assets not registered on Bappebti’s legal crypto assets list cannot be traded in Indonesia.

The Indonesian government has shown that they want what is best for crypto investors and creators and support the growth of cryptocurrencies as long as it is regulated and safe. The long wait and delays for the Indonesian crypto space are over as Indonesia has finally launched the long-awaited crypto exchange and clearing house project.