“This crypto products trading has been going for some years without any legal clarity, until the Ministry of Trade finally decided to put crypto products under the jurisdiction of commodity trading.”
Most people nowadays probably have heard of bitcoin or other similar products such as Litecoin, Dogecoin, Ripple and many others. These crypto based tech products are often known as cryptocurrency. Despite being quite new, they have attracted attentions and controversies in several countries.
Many people worldwide are using these crypto products for buying items, trading, or investment. However, despite has been going viral for some years, Indonesian authorities has only issued the relevant regulations for this product recently. After a long time running in gray area, crypto product users can finally breathe a sigh of relief as they now have a legal basis. However, there is an interesting catch. Crypto based products in Indonesia are considered legal and illegal depend on the usage.
Cryptocurrency vs Crypto asset
As it was first introduced as electronic money, these crypto products are often referred as cryptocurrency. Thus, most people would probably think that it is usable as a payment to buy other items. This is not wrong, as there are many vendors overseas that accept it as payment method, however, the Indonesian authorities has a different opinion.
Bank Indonesia (BI) has been rejecting cryptocurrency as a legal payment and currency option in Indonesia. Referring to Law on Currency, Indonesia only acknowledges Indonesian Rupiah (IDR) as legitimate payment method. This decision is further strengthened with BI Regulation No. 18/40/PBI/2016 on Execution of Payment Transaction and BI regulation No. 19/12/PBI/2017 on Implementation of Financial Technology which states that the usage of virtual currency in transaction is forbidden. The term “virtual currency” in these BI regulation covers any digital money issued by anyone other than BI, such as Bitcoin, BlackCoin, Dash, Dogecoin and others.
However, while BI clearly forbids the usage of crypto product as currency, they don’t regulate any other possible usages of crypto products. While not being used as currency, over the years people have been using crypto products as trading commodities, much like forex and gold. This crypto products trading has been going for some years without any legal clarity, until the Ministry of Trade finally decided to put, crypto products under the jurisdiction of commodity trading.
In September 2018, with the issuance of Ministry of Trade Regulation No. 99 Year 2018, the Ministry of Trade officially set the proper term for crypto products. Every crypto product is now referred as crypto asset. The Ministry of Trade further regulates that crypto asset is subject to futures contract and thus can be exchanged in futures exchange.
In February 2019, Indonesian Commodity Futures Trading Regulatory Agency (Bappebti) issued Regulation No. 5 Year 2019 on Implementation of Crypto Asset physical Market, one of the interesting highlights that crypto asset is considered digital commodity and can be exchanged in futures exchange.
Limitations on Crypto Asset Trading in Indonesia
Despite approving crypto asset as a tradable commodity, Bappebti view it as a high-risk commodity, thus they placed a number of limitations. In order for a crypto asset to be exchanged in Indonesia futures exchange, it must fulfill such as these following requirements:
1.Is traded in world’s biggest crypto asset exchange.
2.Has economic benefit for Indonesia.
3.Has been risk-reviewed.
On top of the commodity being limited, the exchangers are also imposed with some strict requirements. Crypto asset exchangers must have an online trading system that match with Bappebti’s standard, possessed company’s minimum paid-up capital of IDR 1 trillion, with additional another IDR 1 trillion if they also develop and operate own wallet system.
Moreover, the regulation also stipulated that only individual can become a crypto asset trader. This means, business entity can’t exchange crypto asset in futures asset, unless they become an exchanger.
Author: Benedictus Giovanni / Arif Gaffar
Gaffar & Co.
Gaffar & Co. is an Indonesian Boutique Law Firm that focused on commercial law areas includes banking and other financial service.
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