Tokocrypto, a subsidiary of Binance, has obtained the Physical Crypto Asset Trader (PFAK) license from Indonesia’s Commodity Futures Trading Regulatory Agency (Bappebti). Binance announced the development, describing it as a significant milestone for the exchange and the Indonesian crypto industry.
For Binance, the registration solidifies its footprints in Southeast Asian countries and allows it to compete with leading crypto exchanges in Indonesia. After initially investing in the exchange in 2020, Binance bought 100% of Tokocrypto in 2022.
Binance’s Tokocrypto gets authorization for full operation
With the PFAK license, Tokocrypto is now authorized to operate as a physical crypto asset trader in Indonesia, five years after being initially registered as a Prospective Physical Crypto Asset Trader (CPFAK) in 2019. According to Binance, the exchange had to pass a rigorous licensing process before the regulator approved the license.
Binance CEO Richard Teng also acknowledges the importance of this license, noting that it shows the exchange commitment to regulatory compliance and strengthening Indonesia’s Web3 ecosystem.
According to a Binance spokesperson, the transition from prospective to fully licensed for Tokocrypto is a landmark achievement and an opportunity to improve investors’ trust in the exchange and allow it to serve customers better.
The spokesperson said:
“The PFAK license is not only a proud achievement for Tokocrypto but also a significant step toward strengthening investor trust and confidence that showcases Tokocrypto’s commitment to providing secure, transparent, and reliable crypto-asset trading services for users in Indonesia. The license ensures that crypto-asset trading on Tokocrypto meets Bappebti’s strict licensing standards, thereby safeguarding investor interests.”
Speaking on the achievement, Tokocrypto CEO Yudhono Rawis noted that the exchange is the third crypto exchange to get a PFAK license in Indonesia, where over 30 prospective exchanges are registered with the Bappebti. He said this was possible because of the exchange’s commitment to the highest regulatory compliance standards.
He said:
“This is an essential part of our strategy to build a solid foundation in the crypto-asset ecosystem in Indonesia and ensure that we can provide the best services to our customers.”
Meanwhile, Binance is now looking to improve Tokocrypto’s user base and enable the exchange to grow further. The exchange’s user base is already over 4.5 million, and the monthly average trading volume has increased by 136%, highlighting its consistency.
Indonesia’s crypto market is growing
The licensing of Tokocrypto in Indonesia highlights the broader climate of crypto adoption in the country, making it attractive for several crypto entities looking to the Asian market.
A few weeks ago, stablecoin issuer Tether announced that it would organize an educational tour across ten major cities in Indonesia to educate residents about cryptocurrencies and blockchain technology.
Earlier in the year, Bappebti also predicted that crypto transactions in the country in 2024 would reach $51.28 billion, the same level as the bull run in 2021, citing the positive sentiments in the market due to the rise in the value of BTC and other cryptocurrencies.
While the market sentiment has turned neutral, if not negative, in the past few months, Indonesia and Southeast Asia, in general, still remain one of the bright spots for crypto adoption due to the high level of internet access, permissive regulatory environment, and large unbanked population. Countries such as Indonesia, Vietnam, the Philippines, and Thailand are all in the top twenty for crypto adoption, according to the Chainanalysis report in 2023.
Meanwhile, the regulatory oversight for cryptocurrencies in Indonesia will be transferred to the Financial Services Authority (OJK) by January 2025. This could come with major changes, including reclassifying crypto from commodities to financial instruments, and will now require all crypto products to pass through a regulatory sandbox before approval.
