(Kitco News) -
Indonesia has announced plans to establish a national crypto exchange in 2023, according to a Bloomberg report, and the country also plans to place crypto under regulatory review by the Financial Services Authority (FSA).
Currently, digital assets are regulated by the Commodity Futures Trading Regulatory Agency, known in Indonesia as Bappebti. On Wednesday the acting head of Bappebti, Didid Noordiatmoko, said that the regulatory power over cryptocurrencies will move to the FSA by 2024, and the Indonesian exchange will be operational by that time.
While this move appears broadly supportive of crypto development in the world’s fourth most populous country, the Indonesian government has also signaled that it sees cryptocurrencies as a potential threat to its financial system. Bank Indonesia (BI), the country’s central bank, released a white paper on Dec. 1 which outlined their approach to a possible central bank digital currency (CBDC) in response to the growing influence of cryptocurrencies in the country.
“The future of the central bank is at a crossroads,” wrote BI Governor Perry Warjiyo. “Digital innovations may not only disrupt the banking system, but on a more pervasive scale, the possible disruptions on official currencies and central banking triggered by the advent of stablecoins and unbacked crypto assets.”
The report also warned that stablecoins and unbacked crypto assets could increase the risk of money laundering and terrorism financing as well as “macrofinancial risk in the form of shadow currency and shadow banking that undermine the effectiveness of central bank policy,” and noted that some experts believe these assets could establish “a Digital Currency Area” that disregards central banks and exerts pressure on the international monetary system on a global scale.
“Needless to say, the central banking community will not just sit it out and do nothing. Nor will BI,” Warjiyo said, adding that central banks view CBDCs as “a prospective future-proof solution.”
According to Bappebti, there are currently 383 crypto assets and 10 local tokens that can legally be traded in Indonesia, and an additional 151 assets and 10 tokens are under review.
