Cryptocurrency and blockchain technology are rapidly evolving fields that have the potential to transform the global economy. These technologies enable faster, cheaper, and more secure transactions and have the potential to increase financial inclusion, reduce corruption, and promote economic growth. As one of the largest economies in Southeast Asia, Indonesia is well-positioned to play a significant role in shaping the future of these technologies.
The Indonesian government has recently created a favorable regulatory environment for cryptocurrency and blockchain development. The launch of the bourse for crypto in Indonesia by the Commodities Futures Trading Regulatory Agency (Bappebti or CoFTRA) indicates the government’s support for the growth of the cryptocurrency market in the country. The policy, combined with a growing population of tech-savvy young people, has created a fertile ground for innovation in the cryptocurrency and blockchain area.
Cryptocurrency and Blockchain Development in Indonesia: A Catalyst for International Influence
Developing cryptocurrency and blockchain technology in Indonesia has implications for international relations. As these technologies continue gaining traction globally, countries at the forefront of their adoption and development will likely wield greater influence in international trade and finance. By embracing cryptocurrency and blockchain technology, Indonesia can position itself as a leader in these fields, potentially enhancing its standing on the global stage.
On July 20, 2023, Indonesia inaugurated a national platform for crypto assets, serving as a trading venue and a clearing house. This groundbreaking initiative aims to furnish regulatory authorities with comprehensive transaction records, enhancing their oversight capabilities. This establishment marks the world’s pioneering instance of a government-supported cryptocurrency exchange. The oversight of this novel venture is entrusted to the Bappebti.
After overcoming substantial delays, the eagerly anticipated national crypto exchange commenced operations on July 17, 2023. A pivotal catalyst for this development was enacting a new law in January 2023, endorsed by the President of Indonesia, Joko Widodo. This legislative measure has ushered in amendments to 17 outdated local statutes, aligning them with contemporary technological advancements. Consequently, the potential exists for a transformative reclassification of crypto assets within the nation’s legal framework – a departure from their traditional classification as commodities akin to precious metals or minerals, with a prospective reclassification as securities.
The blockchain association of Indonesia (ABI) has expressed optimism regarding the foundational technologies underpinning cryptocurrencies. This optimism is underscored by the impending regulatory oversight of the industry by the Financial Services Authority (OJK) under its “Financial Sector Technological Innovation” directives. Evidencing the burgeoning growth of the cryptocurrency domain within Indonesia, recent years have witnessed a substantial upswing. As of May 2023, the country boasts an impressive 11.2 million registered cryptocurrency investors.
Adopting cryptocurrency and blockchain technology could facilitate economic integration between Indonesia and other countries. By enabling faster, cheaper, and more secure cross-border transactions, these technologies can potentially increase trade and investment flows between Indonesia and its trading partners. This condition could deepen economic ties between Indonesia and other countries, promoting greater cooperation and collaboration on regional and global issues.
Implication for Indonesia’s International Relations
In addition to its potential economic benefits, adopting cryptocurrency and blockchain technology could have political implications for Indonesia’s international relations. During Indonesia’s tenure as the presiding nation of the G20 in 2022, it broached the subject of cryptocurrency and blockchain technology. In this capacity, the Indonesian Presidency introduced the “Presidency Note on the Establishment of a Global Framework for Crypto Assets,” which served as a valuable contribution towards shaping a comprehensive strategy in this realm.
A supportive disposition has characterized Indonesia’s stance towards crypto assets, although the country has prohibited their utilization as a means of payment. Nevertheless, they are accorded the status of a legitimate investment avenue.
A notable milestone in Indonesia’s trajectory with crypto assets transpired in July 2023, with the inauguration of a national crypto asset exchange platform and clearing house. This pioneering initiative, supervised by the Bappebti, marks the world’s inaugural instance of a government-endorsed cryptocurrency exchange.
Moreover, delegating regulatory authority to the OJK signifies a significant alteration in the nation’s methodology for overseeing the cryptocurrency sector. This adjustment conveys the understanding that the sector encompasses aspects beyond mere asset exchange, highlighting the imperative for focused vigilance. The strategic decision to intensify regulatory scrutiny and endow the OJK with the mandate to govern and oversee digital asset operations, encompassing cryptocurrencies, is a deliberate endeavor to enhance safeguards for investors. This strategy of heightened regulatory supervision holds the potential to mitigate potential hazards and promote adherence to established protocols, thereby augmenting investor assurance and bolstering confidence within the cryptocurrency landscape. It is not surprising if Indonesia can make themselves be a more attractive destination for international crypto investors and businesses.
The trajectory of cryptocurrency and blockchain technology in Indonesia carries profound implications for its domestic landscape and its position on the global stage. As these transformative technologies continue to reshape economies and societies worldwide, Indonesia’s proactive approach to fostering a conducive environment for their growth positions the nation at the forefront of innovation and progress. Establishing a national crypto asset exchange platform and clearing house, coupled with the government’s supportive stance towards cryptocurrency and blockchain development, underlines Indonesia’s commitment to becoming a significant player in this evolving landscape. By leveraging these technologies, Indonesia aims to enhance its financial and economic landscape and bolster its international standing.
Furthermore, the ethical dimensions of these technologies, such as improved transparency and reduced corruption, could enhance Indonesia’s reputation as a responsible global actor. By fortifying governance and democratic institutions, Indonesia may elevate its influence in international forums, contributing to positive changes on the global stage. In this context, Indonesia’s role as the presiding nation of the G20 in 2022 and its pioneering initiatives in the cryptocurrency sector demonstrate the nation’s intent to actively shape the discourse and direction of cryptocurrency and blockchain technology. As these fields evolve, Indonesia’s stance and actions position it as a potential leader in the ongoing narrative of technological innovation and its implications for international relations.