Opinion by: Mohammed AlKaff AlHashmi, Co-founder of Haqq Network.

The world is now embracing the evolution of Web3. Meanwhile, in Indonesia, there is nothing short of a Web3 revolution taking place. With its remarkable level of crypto adoption, a young, tech-savvy population and a supportive regulatory environment, Indonesia is set to become a global leader in Web3 innovation in the coming years. As the local market grows, however, more solutions must be found that align with the Indonesian population’s unique cultural and ethical values.

Revolution in numbers

Indonesia boasts some of the most substantial growth numbers in the crypto market globally. The country ranks third in the Chainalysis Global Crypto Adoption Index, trailing only India and Nigeria. Indonesia’s crypto industry experienced $157 billion of value inflows between 2023 and 2024, making it a leader in Central and Southern Asia and Oceania. The country’s crypto market is one of the fastest-growing in the region, surging by nearly 200% year-on-year.

Recent: Indonesian cryptocurrency transactions cross $30B for 2024

A significant portion of Indonesia’s crypto market activity is attributed to trading. In 2024, the country experienced a surge in crypto transactions and traders, particularly interested in memecoins. Notably, much of this volume comes from decentralized products. In Indonesia, the share of decentralized exchange (DEX) transactions among all crypto transfers is markedly higher than regional and global averages (43.6% compared to 27.8% worldwide).

The Indonesian government’s positive stance toward crypto supports this growth. The regulators recently reclassified cryptocurrencies from commodities to digital financial assets, adding to the country’s elaborated crypto framework. The Indonesian Commodity Futures Trading Regulatory Agency (Bappebti), known for its openness toward market players in licensing, is set to transfer its oversight responsibilities to the Financial Services Authority (OJK), which will enhance the crypto industry with greater recognition, improved transparency and more robust investor protection.

Crypto is also making inroads into other sectors of the Indonesian economy. By 2024, the number of crypto transactions in the country’s e-commerce sector — an $80-billion industry — had experienced a massive surge. Moreover, crypto offers tangible benefits to a wide range of users, as it has reduced remittance fees: Every year, Indonesians save up to $300 million on money transfers.

Moving beyond 8%

For many Indonesians, crypto serves as a store of value and the best way to make cross-border payments. As people get familiar with simple crypto products, they embrace more complex mechanics like yield farming and staking. These serve as an easy gateway to finance for Indonesians, especially younger generations.

Indonesia has a very young population — people aged 10–19 form the largest demographic group in the country and are soon to become (and are already becoming) participants in the financial system. Meanwhile, a third of Indonesia’s 277.5 million population remains unbanked. These new economic participants will likely turn to crypto rather than traditional financial products, which even their parents often lack access to. That presents a unique investment potential for anyone entering the Indonesian Web3 market.

With Indonesia’s global leadership in crypto adoption, the country’s reported number of crypto users now stands at only 21.3 million, less than 8% of its population. The industry should develop diverse crypto use cases and solutions tailored to the country’s unique cultural and ethical ecosystem to maintain leadership and embrace the remaining 92%.

With 87% of Indonesians identifying as Muslims, their financial behavior is influenced by Islamic principles, imposing specific requirements on the services they use daily. While the traditional economy offers plenty of such products, the crypto market needs to catch up to provide Indonesians with solutions they can use without compromising Islamic values.

First of all, these could include Shariah-compliant solutions. Interest is prohibited in Islamic finance, limiting the opportunity to borrow, lend and provide liquidity for Muslims. Decentralized finance platforms for Islamic banking could address this by offering financial tools that comply with Islamic values. Blockchain-based zakat (charity) distribution systems would add transparency and efficiency to Islamic donations.

Second, localized Islamic finance-focused education initiatives could demystify crypto and address common concerns around ethics and security, particularly for older generations and rural areas where skepticism toward digital assets might be higher.

Third, as growing ties between the crypto and fiat economies is a global trend — and Indonesia is no exception — collaborating with local institutions would give extra motivation. Partnering with Indonesian banks, regulators and fintech startups would help create hybrid solutions that integrate traditional financial systems with blockchain technology.

Finally, the industry should focus on real-world use cases. Crypto adoption could reach new heights if more products cater to pressing local needs, such as cross-border remittances, certifications or decentralized microfinancing for small businesses.

Ethics-first solutions could address the financial needs of a broader Indonesian audience and introduce the world’s fourth-largest population to the benefits of the crypto economy. That would help unlock further industry growth in Indonesia and maintain the country’s leadership position on a global scale.

It has long been known that digital assets find particular demand in developing countries, where people struggle to access traditional financial tools or seek ways to cope with inflation. Indonesia is an excellent example of how this demand can produce remarkable outcomes when guided in the right direction. With its regulators taking a pro-crypto stance, the country spearheads a global Web3 revolution, challenging the dominance of established global crypto hubs.

Mohammed AlKaff AlHashmi is the co-founder of Haqq Network. Mohammed has over 18 years of experience in computer science and engineering, focusing on Industry 4.0, artificial intelligence, machine learning, industrial automation and the Internet of Things.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.