The Financial Services Authority (OJK) in Indonesia is set to be given authority over the cryptocurrency market and investments. Sri Mulyani Indrawati, Indonesia’s finance minister, has announced the country will transfer the authority to OJK in order to better safeguard consumer interests which is presently under the country’s Trade Ministry and the Commodity Futures Trading Regulatory Authority.
The recent events surrounding the collapse of FTX, which used to be one of the world’s largest crypto exchanges, affected Indonesia’s attitude towards the digital asset market. Indrawati said the cryptocurrency sector has experienced the “turbulence recently” as the result of FTX crisis, which began last week after leaked Alameda records revealed significant illiquid exposures to various altcoins including SOL and FTT.
Indonesia aiming tighter crypto regulations
A recent report by Reuters indicates that the new proposal presented by Indrawati is part of bigger legislation that was filed to the government earlier this year. The law is now being discussed in the country’s parliament. Addressing the parliament about the necessity for tight laws to protect all financial sector technology innovation in Indonesia, including crypto assets, the finance minister stated that this was necessary. She told lawmakers at Thursday’s parliamentary hearing:
“We need to build a mechanism of supervision and investor protection that is quite strong and reliable, especially for investment instruments that are high risk.”
Though cryptocurrencies are not yet recognized as legal money in Indonesia, they are permitted on the commodity market. Indrawati, speaking to parliament about the new strategy, said that the country’s crypto investor base now exceeds that of the stock market.
To compare, there were only 9.1 million people who invested in traditional stocks as of June, while 15.2 million people invested in digital assets. There were only four million crypto investors in Indonesia in 2020, but that number has increased dramatically in the last two years.
Interestingly, this past April, reports surfaced that the Indonesian government was planning to charge a 0.1% capital gain tax on investments in digital assets.