“Cryptocurrency Business in Indonesia. Crypto development is currently regulated briefly under the Ministry of Information and Communication. On the other hand, crypto trading is regulated a bit more thoroughly as it has been acknowledged as commodities that can be traded under the supervision of Indonesia Commodity Futures Trading Regulatory Agency.”
Nowadays, cryptocurrency has become quite common. It is no longer just a concept but has been integrated into many aspects, including professional business. Every day, new business concepts revolving around crypto keep appearing. While the legal side is trying to keep up, however, only a handful of them have been regulated under Indonesia Law.
As a digital asset, crypto business under Indonesian Law can be divided into 2 (two): crypto development and crypto trading. Crypto development is currently regulated briefly under the Ministry of Information and Communication; on the other hand, crypto trading is regulated more thoroughly.
It has been acknowledged as commodities that can be traded under the supervision of The Indonesia Commodity Futures Trading Regulatory Agency (Bappebti).
Capital Requirement, KBLI, and Negative List
In Indonesia, every business field is assigned a KBLI Code, short for Klasifikasi Baku Lapangan Usaha Indonesia / Indonesian Standard Industrial Classification. Each has a different set of requirements, including different capital requirements and limitations of foreign investment (negative list).
Crypto Development is assigned under KBLI 62014, Blockchain Technology Development Activity. This KBLI includes the activity of blockchain technology development, such as implementing smart contracts and designing public blockchain infrastructure and private blockchain. As of right now, this KBLI is regulated under the Minister of Information and Communication Regulation No. 3 of 2021, together with other IT-related KBLI.
It is open 100% to foreign investment and does not require any specific license or capital requirement. However, it is still required to submit a technology roadmap to the Minister of Information and communication and submit at least an annual report on the development. Crypto trading is assigned under KBLI 66153, commodities physical trader. Like crypto development, it is open 100% to foreign investment; however, it requires a more specific capital requirement and license.
As of right now, crypto trading is regulated under Bappebti Regulation No. 8 of 2021, which is constantly updated to keep up with the development of crypto trading in Indonesia.
Under this regulation, several types of crypto trading-related businesses are currently available in Indonesia: Crypto Exchange, crypto futures clearing house, crypto-asset physical trader, and Crypto asset repository. Crypto exchange must have at least IDR 500 billion of paid-up capital upon registration and is expected to raise it to IDR 1 trillion at least 3 (three) months after it has been established.
The futures clearinghouse is required to have IDR 500 billion of paid-up capital, similar to crypto exchange; however, it is not required to raise it after establishment. Crypto asset physical trader is only required to have at least IDR 80 billion of paid-up capital. Lastly, the crypto asset repository must have at least IDR 250 billion of paid-up capital.
Establishment Process
Crypto trading-related businesses require a license from Bappebti. In other words, to establish one, it would need to first acquire a Business Identification Number (NIB) from OSS and then proceed to obtain an additional license from Bappebti. However, unlike most other crypto trading-related businesses, a crypto asset physical trader is a bit special.
Bappebti is still waiting for an official crypto exchange and crypto futures clearinghouse to be established in Indonesia. Until it is established, any physical trader is allowed to register to Bappebti as a crypto asset physical trader applicant.
As an applicant, it is allowed to engage in the same activity as an actual crypto-asset physical trader, but with the lower capital requirement, only IDR 50 billion. The licensing process itself is pretty fast, as, by law, it must be issued in under 3 (three) working days. However, after an official exchange and clearinghouse have been established, a crypto-asset physical trader applicant must re-register as an actual crypto-asset physical trader.
Limitation on Crypto in Indonesia
Most crypto trading-related businesses, under Bappebti regulation, are not allowed to be mixed with other businesses. A crypto exchange is not permitted to provide transactions for commodities other than crypto. A crypto-asset physical trader’s activity is strictly limited to:
- Providing sell and/or purchase between crypto asset and rupiah;
- Providing exchange between different types of crypto assets;
- Providing wallet service to crypto assets; and
- Providing transfer service of crypto assets between wallets.
Furthermore, it is not allowed to have another business activity other than this one.
Latest Update on Crypto Capital Exchange
As of right now, an official crypto exchange is expected to be established in early 2022. But, unfortunately, up until now, there is still no official announcement from Bappebti. It should be noted, however, referring to Bappebti Regulation no. 8 of 2021, after an official crypto exchange has been established, every crypto asset physical trader applicant is required to re-register in no more than one month and is expected to fulfill the same requirement, including capital requirement, of crypto-asset physical trader in no more than a year.
Author: Benedictus Giovanni
Gaffar & Co., an Indonesian Boutique Law Firm specializing and focusing on commercial law areas e.g. Information & Technology.
For further queries and information, contact us:
+62 811 877 216 | info@gaffarcolaw.com | www.gaffarcolaw.com
