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Indonesia’s New Crypto Rules Tough on Futures Trading

Indonesia’s New Crypto Rules Tough on Futures Trading

Newly-released rules for Indonesia’s cryptocurrency sector have been met with concern by industry players, who accuse the government of limiting the industry’s effectiveness, as reported by the Jakarta Post.

New government regulations, given the green light last week, require cryptocurrency traders to maintain a deposit of IDR 80 billion (Indonesian rupiah or approximately USD 5.7 million) in order to participate in futures trading activities. Cryptocurrency traders will also be required to have a minimum paid-up capital of a further IDR 800 billion (USD 56.7 million).

The Indonesian markets regulator, the Trade Ministry’s Futures Exchange Supervisory Board (Bappebti) issued Ministerial Regulation No. 5/2019 that also requires traders to have client support personnel who have been registered as certified security practitioners in order to operate.

The industry in Indonesia has made its objections clear, arguing that the Bappebti are penalizing the cryptocurrency industry in a way that hasn’t been the case with other sectors of the economy. Traders argue that the minimum capital requirement, for example, exceeds what is demanded when launching a rural bank, and dealers in conventional futures commodities require a lower paid-up capital in order to operate.

Under the new regulations, cryptocurrency futures traders in the country will need to store transaction records for at least five years, with the proviso that at least one of their servers are located in Indonesia.

Although the use of Bitcoin and other cryptocurrencies have been banned by the Bank of Indonesia (BI) futures trading is quite legal after rules were put in place last year. The country has experienced a trading boom despite the ban on actual cryptocurrency use, with reports last year that that crypto traders were expected to outnumber stock traders with time.

In other news from Indonesia, a Jakarta man was arrested this week for operating a mining program using a college computer. The 22-year-old former student at the college has been accused of using a HoneyMiner program to mine Bitcoin and Monero on 27 college computers.

 

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Indonesia Knowledge-Sharing Blockchain Hub Launches in Jakarta

The Indonesia Blockchain Hub was launched in Jakarta this week, described as a center for the sharing of industry knowledge, both locally and internationally.

The centee was opened in partnership with the Indonesia Chamber of Commerce (KADIN), Indonesia Blockchain Association (ABI), BEKRAF and HARA, an agritech startup.

The ABI has become instrumental in promoting blockchain in the South East Asian country through accelerating understanding, utilization, advancement and technological inventiveness in relation to the fourth industrial revolution. South East Asia’s largest economy is seeing both public and private sectors investing in applying blockchain technology to address issues surrounding the storage and application of data within the country in a number of sectors.

Banks for one, are looking at DLT with more interest, as discovered by a survey published last year indicating that about 80% of financial institution executives see blockchain impacting future markets. Rico Ustahavia Frans, director of digital banking and technology at Bank Mandiri, Indonesia’s second-biggest bank by assets, said it was currently looking at applying blockchain, once regulators had formulated guidelines for banking and financial institutions.

The launch of the new hub has to be a feather in Indonesia’s cap and signals its intent to become a significant player on the world stage in adopting the new technology. HARA CEO and co-founder of the hub, Regi Wahyu, sees blockchain being integrated into a range of areas of Indonesian society:

“We believe that data transparency as enabled by blockchain technology will help the bottom of the societal pyramid to improve their welfare… [which] will lead to improvement in business and economic performance. Based on HARA’s experience… there remain challenges in explaining the socio-economic impact of blockchain for business, regulators, and the society in general.”

Wahyu added that there is a need in the country for a platform which can extend blockchain knowledge in the community, one of the aims of the new hub. The Indonesia Blockchain Hub along with the IBA is now one of a growing number of bodies set up to support the dissemination of blockchain awareness in the country and share information. Another is the blockchain-focused coworking space Blockchain Space.

A number of government institutions, including the postal service, now utilize blockchain solutions across the country as its deployment spreads to different sectors of society.

 

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