Indonesia’s Regulatory Sandbox for Crypto Assets

The Indonesian Financial Services Authority (OJK) has made an announcement stating that any local financial services institutions that want to introduce new products and services must first go through a regulatory sandbox. This applies to crypto asset products as well. The purpose of the sandbox is to allow businesses to test out and experiment with their innovations within a limited period. The OJK wants to ensure that any crypto firms operating in the country have undergone evaluation and approval from the regulator. By including crypto assets in the regulatory sandbox, the OJK aims to combat fraudulent investments and protect consumers.

Starting in January 2025, the OJK will take over the regulation of the crypto industry, which currently falls under the jurisdiction of the country’s commodities agency, Bappebti. While crypto assets are currently classified as commodities in Indonesia, there is speculation that they may be reclassified as financial instruments once the OJK assumes governance.

Over the past year, the crypto landscape in Indonesia has been gaining momentum. In the country’s most recent presidential elections, a pro-crypto candidate was elected as vice president. This candidate, Gibran Rakabuming Raka, pledged to cultivate blockchain, crypto, AI, and cybersecurity experts who would promote digital innovation among local youth. To support the crypto industry, Indonesia launched its national crypto exchange, the Indonesian Crypto Asset Futures Exchange, which operates under the supervision of local regulators. The exchange is the only platform in the country for legally trading digital assets. Indonesia has started conducting blockchain trials in public services to explore the technology’s potential.

Earlier this month, there were reports that Indonesian officials were considering revising the dual taxation on crypto. They raised concerns about the current 0.1% capital gains tax and 0.11% VAT on crypto transactions and suggested reevaluating these measures. It remains to be seen how this potential tax reform will unfold.