The Indonesian Financial Services Authority (OJK) has mandated that local financial services institutions introducing new products and services must either participate in the regulatory sandbox or make room for testing upcoming innovations, including those involving crypto-assets.
As reported by local Indonesian media outlet DetikFinance, once crypto-assets are subject to regulation, they will also be required to undergo scrutiny within the regulatory sandbox framework.
This entails cryptocurrency companies in the sandbox phase undergoing evaluation by the regulator before they can commence operations within the country.
Regulatory sandboxes serve as platforms for companies to trial and explore new innovative products or services for a defined period, allowing for controlled experimentation.
Hassan Fawzi, head of technological innovation, digital financial assets, and crypto-asset supervision in Indonesia's financial sector, emphasized that the inclusion of crypto-assets in the regulatory sandbox aims to curb fraudulent investments. Furthermore, the OJK has announced its intent to assume regulatory oversight of the cryptocurrency industry starting January 2025, currently under the purview of the country’s commodities agency, Bappebti.
While Indonesia currently classifies crypto-assets as commodities, speculation suggests that their governance under the OJK may prompt a reconsideration of their classification as financial instruments.
The cryptocurrency landscape in Indonesia has witnessed significant developments, with a pro-crypto vice-presidential candidate elected in the recent presidential election. During the campaign, Gibran Rakabuming Raka pledged to foster expertise in blockchain, cryptocurrency, artificial intelligence (AI), and cybersecurity to encourage local youth to engage in the digital sphere. Additionally, the launch of Indonesia Crypto Asset Futures Exchange, regulated by local authorities, stands as a pivotal moment, marking the country's sole legal digital asset trading platform. Notably, the nation has also initiated blockchain trials in public services.
Reports in early March indicated Indonesian officials’ contemplation of amendments to the double taxation policies on cryptocurrencies, advocating for a reevaluation of the current 0.1% capital gains tax and 0.11% value-added tax on cryptocurrency transactions.
