Indonesia To Launch State3-Backed Crypto Exchange In Mid-202

Didid Noordiatmoko, the head of Bappebti, stated that Indonesia would launch a state-backed crypto exchange in mid-2023. The exchange will be run by a private company, following the model of stock markets, with separate trading, clearing, and custody.

According to Noordiatmoko, the new exchange will safeguard customer assets and prevent fraud cases. Last year, the Indonesian government tightened regulations on digital asset exchanges, requiring at least two-thirds of their management to be Indonesian residents.

In 2021, crypto asset transactions in Indonesia reached 859.4 trillion rupiahs ($57.7 billion), a 1,224% increase from 2020, as per Bappebti. Additionally, the country ranked 20th in Chainalysis’ 2022 global adoption index out of 146 economies.

However, recent events in the crypto industry have hit Indonesia’s sector hard. High-profile crypto companies, including FTX and Zipmex, filed for bankruptcy last year, delivering billions in losses to retail customers. Data from CryptoCompare shows that monthly trading volumes have crashed 95% to $233 million last month from a peak of $4.7 billion in May 2021.

In light of these challenges, the launch of the state-backed digital asset exchange is expected to boost crypto adoption in Indonesia. It will help regulate the industry and restore investors’ confidence. “The industry will grow, we’ll start seeing more local projects,” said Pang Xue Kai, CEO of major Indonesian crypto platform Tokocrypto.

Challenges Ahead for Indonesia’s Crypto Industry

The plan to establish a state-backed exchange in Indonesia is facing several challenges. To prevent fraud, the government must regulate the new exchange and address cybersecurity issues in the crypto industry. Recent hacks and exploits have caused the loss of billions of dollars, highlighting the need for increased security measures.

Related Reading |Hong Kong Regulator Proposes Limited Crypto Trading for Retail Investors

Another challenge is ensuring the new exchange is accessible to all Indonesians, including those living in rural areas. The government needs to invest in digital infrastructure to make the exchange available to everyone, regardless of their location. The government should educate the public on the risks and benefits of crypto to avoid scams and fraud. This will help promote responsible investing and protect consumers.

In conclusion, the launch of a state-backed exchange in Indonesia is a positive step for the country’s crypto sector. While there are challenges ahead, the government must prioritize security, accessibility, and regulation of the new exchange. This will be crucial for promoting trust in the industry and fostering its growth. If successful, the business could help Indonesia become a leading player in the global crypto industry.

The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing

Comments (No)

Leave a Reply