The Indonesian government has made changes to the country's legislation, according to which digital assets will be considered securities.
After several months of discussions, on January 12, Indonesian President Joko Widodo signed a law according to which the regulation of the cryptocurrency industry in the country will be handled by the Indonesian Financial Services Authority (OJK), without the participation of the Commodity Futures Trading Regulatory Agency (CoFTRA). These changes mean that Indonesian regulators will consider cryptocurrencies to be securities rather than commodities. Now the same requirements that apply to investment contracts will apply to the placement and sale of cryptocurrencies.
Asih Karnengsih, head of ABI's public blockchain development group, called the initiative the right step. The adopted law will update the state's outdated regulatory framework, bringing it into line with the rapid changes taking place in the digital asset industry. This proves the progressive development of the industry, because regulators have begun to understand that crypto assets are much broader than just trading, says Karnengsih. He suggested that the transition of authority from CoFTRA to OJK could take several years to avoid drastic changes in the local cryptocurrency ecosystem.
However, given that OJK is suspicious of cryptocurrencies, the industry will be much more strictly regulated in the country. The agency has repeatedly warned the public about the risks of cryptoassets and reminded financial institutions that they are prohibited from using them.
Earlier, the governor of the Central Bank of Indonesia said that cryptocurrencies pose a threat to the financial system, but at the same time motivate central banks to create their own digital currencies. Last fall, the Indonesian Central Bank introduced the concept of a digital Indonesian rupiah in response to the increase in digital payments.