thecoinrepublic.com
- Indonesian Central Bank outlawed cryptocurrency transactions and payments
- Indonesian cryptocurrency commerce has exploded in the last 18 months
- transaction volumes reached $4.5 billion in 2020
While China put the cryptocurrency industry into a tailspin, Indonesia has stated that it will not follow its neighbour’s lead and outright ban all cryptocurrency transactions. Rather than imposing a blanket ban, the country is considering enacting legislation to prevent unlawful cryptocurrency activity.
We don’t prohibit it, but we will tighten the regulations, said Muhammad Luthfi, the Southeast Asian country’s Minister of Trade. Earlier this month, the Indonesian Central Bank outlawed cryptocurrency transactions and payments, as well as their usage as other financial services tools.
Despite these measures, Indonesia’s cryptocurrency trade has exploded over the past 18 months, with transaction volumes reaching $ 4.5 billion in 2020. Total bitcoin transactions on 13 exchanges certified by the country’s Futures Exchange Supervisory Board (Bappebti) increased by 40% in the first five months of this year, according to Bappebti. During this time, the number of people trading crypto assets increased from 4 million to 6.5 million.
In Indonesia, cryptocurrencies are now considered investments and commodities. Residents of the country are allowed to trade the digital currency, but they are not allowed to be used as a form of payment.
Cryptocurrency transactions are prohibited, according to the People’s Bank of China, reiterating earlier restrictions. All financial operations connected to virtual currency derivatives, such as crypto trading, token sales, and transactions involving virtual currency derivatives, are likewise prohibited. Following a months-long crackdown on bitcoin mining and trading across the country, the announcement impacted cryptocurrency markets.
Indonesia sees surge in crypto trading
The reaffirmation of China’s stance on decentralised money had an impact on crypto values in Indonesia as well. Following the PBOC announcement on Friday, Bitcoin (BTC) plummeted 7.4% to 595 million Indonesian rupiah (below $41,000) on the country’s largest exchange, Indodax in the Monday trading session. The largest cryptocurrency by market capitalization has since rebounded to $41,753.60 as of writing.
Indonesian crypto trading, according to sources, has been booming for the past year and a half. In the first five months of 2021, transactions on 13 domestic markets authorised by the Futures Exchange Supervisory Board rose by 40%. According to the data, the transaction volume hit 65 trillion rupiah ($4.5 billion) in 2020.
Another prominent exchange in the nation, Luno Indonesia, expressed optimism that it could double or even triple its existing client base of 700,000 members.