Indonesia: Cryptocurrencies to be Treated as Commodities

Cryptocurrencies can be traded as commodities, Indonesia’s commodities regulator has announced. The decision comes after a study by the Futures Exchange Supervisory Board (Bappebti) that lasted four months. The markets regulator operates under the Ministry of Trade.

Dharma Yoga who is in charge of market supervision at Bappebti said a formal decree to make cryptocurrency a commodity that can be traded in the bourse had been signed according to Jakarta Post.

Regulations to cover issues such as money laundering, taxation, terror financing are also in the pipeline according to Yoga. The regulations will also cover exchanges and wallet providers.

A number of authorities will be involved in their crafting including the central bank and the Financial Services Authority, according to a report.

Bappebti will work with cryptocurrency exchanges on the legislation. The body has already asked exchanges to give their product specifications and trading procedures.

Change of Tune

The central bank had initially placed a ban on cryptocurrencies in December 2017, a position it reasserted in January this year. The categorisation offers some reprieve to many investors who have been facing months of uncertainty.

Several exchanges were forced to shut down after the central bank failed to recognize them as forms of payment. In January, the Bank of Indonesia issued a notice saying that virtual currencies were not a legitimate form of payment as they were not issued by the Republic of Indonesia.

Furthermore, the notice stated that cryptocurrencies were not in compliance with the currency act of 2011.

The act dictates that “financial transactions conducted within the territory of the Republic of Indonesia, has to be fulfilled with Rupiah,”

The January notice expressly barred payment system operators from processing transactions using virtual currency.

The regulator had further warned about high volatility in cryptocurrencies, potential for use in money laundering and financing terrorism. The central bank also raised concerns about the lack of oversight and threats to financial stability.

The status of cryptocurrency exchanges was not however defined.

Cryptocurrencies enjoy enormous popularity in the Asian nation with the number of people registered in exchanges exceeding that in the stock market.