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March 28, 2024Indonesia to implement regulatory sandbox for crypto assets
The Indonesian Financial Services Authority (OJK) has announced that local financial institutions offering new products and services, including crypto asset products, must participate in the regulatory sandbox or undergo evaluation before operating in the country.
Inclusion of Crypto Assets in Regulatory Sandbox
The OJK will require crypto assets to undergo evaluation within the regulatory sandbox once regulated and supervised.
Crypto firms in the sandbox stage will need approval from the regulator before commencing operations, contributing to the eradication of fraudulent investments.
Transition of Regulatory Oversight
Starting January 2025, the OJK will assume regulation of the crypto industry, which is currently under the jurisdiction of the commodities agency, Bappebti.
While Indonesia currently classifies crypto assets as commodities, their governance by the OJK may lead to reconsideration as financial instruments.
Growing Crypto Landscape in Indonesia
Indonesia has experienced a surge in crypto activity, with a pro-crypto candidate elected as vice president in the recent presidential elections.
The elected vice president pledged to support digital innovation, including blockchain, crypto, artificial intelligence (AI), and cybersecurity.
In 2023, Indonesia launched its national crypto exchange, the Indonesian Crypto Asset Futures Exchange, monitored by local regulators.
The exchange facilitates legal digital asset transactions and has initiated blockchain trials in public services.
Proposed Changes to Crypto Taxation
Indonesian officials are contemplating adjustments to the country’s dual taxation on crypto, advocating for a reevaluation of the current 0.1% capital gains tax and 0.11% VAT on crypto transactions.
Indonesia’s move to implement a regulatory sandbox for crypto assets underscores its commitment to fostering innovation while ensuring consumer protection. With the upcoming transition of regulatory oversight to the OJK and proposed changes to crypto taxation, Indonesia aims to create a conducive environment for the growth of its crypto industry.
