Indonesia, has emerged as a formidable player in the global cryptocurrency space in recent years. However, the nation’s upcoming general elections in February have introduced uncertainty over what policy directions the newly elected leadership may chart for this innovative yet loosely regulated industry. While incumbent President Joko Widodo’s administration had sought to position Indonesia on the global map as a progressive digital economy and established the world’s inaugural cryptocurrency exchange, it remains unclear whether successor governments will maintain or overhaul this pro-crypto stance. The diverse economic platforms of leading contenders offer clues but no guarantees about crypto’s fate under new leadership.
Regulatory framework
Currently, the Commodity Futures Trading Regulatory Agency (BAPPEBTI) regulates cryptocurrency as a commodity in Indonesia. However, oversight is expected to transfer to the more powerful Financial Services Authority (OJK) in 2025. This transition raises hopes among crypto businesses for a lighter-touch, innovation-friendly rulebook that eases compliance burdens like onerous transaction taxes now said to deter traders.
Candidate perspectives
None of the major candidates have issued comprehensive crypto policies but past remarks provide insights. Anies Baswedan and running mate Muhaimin Iskandar of the opposition National Awakening Party have kept views private but advocate reviewing all policies as leaders. In 2022, Iskandar supported taxing crypto profits and stricter OJK oversight.
Another pair, Governor Ganjar Pranowo and constitutional lawyer Mahfud MD remain quiet on crypto. However, in 2022, Pranowo praised an Indonesian non-fungible token success for inspiring youth despite reminding them of tax obligations.
Defense Minister Prabowo Subianto’s projected victory alongside running mate Gibran Rakabuming Raka signals probable continuity of pro-crypto directions. Raka champions technological advancement and blockchain expertise. He and Prabowo want enhanced monitoring of online trading platforms to curb tax evasion.
Crypto sector concerns
Regardless of outcomes, Indonesia’s vibrant crypto sector wants avoidance of overregulation that stifles technological progress. Chief concerns are complex tax compliance requirements, high transaction fees and ambiguity around legal status. While it is important to address tax obligations, overly burdensome policies may lead to capital flight to more favorable markets such as Singapore or the Middle East. Industry representatives stress the urgent need for regulatory clarity to develop continued growth and investor trust. The election’s outcome will determine whether Indonesia solidifies its role as a crypto leader or applies brakes to this burgeoning financial revolution.
