Bitcoin Officially Classified As A Commodity Within Indonesia’s Borders
The regulations involving the various countries around the world keep changing, which has made it difficult for investors to determine exactly how to use their crypto assets within any given country. While there are multiple authorities in the United States that offer various definitions, regulators in Indonesia have made one thing simple – Bitcoin is considered a commodity.
With this new classification, it becomes much easier to create a legal provision for cryptocurrencies and their exchanges. Now, the country will have certain requirements for any exchange that wants to operate. The regulation was issued by the Indonesian Trade Ministry Futures Exchange Supervisory Board (Bappebti) and is filed as No.5/2019.
This new provision includes regulations that dictate how cryptocurrency exchanges will be run and how cryptocurrency assets will be used. It effectively makes virtual currency trading a legal action, through exchanges are required to employ IT security experts. They will have to track all exchanges performed by the exchange for a total of five years, and one of the main servers has to be physically located in Indonesia. Even as a commodity, the policy states that cryptocurrencies need to comply with protocols that outline risk assessment, anti-money laundering, and terrorism financing.
Every exchange is required to have a clear and defined structure for the platform. Much like most businesses, exchanges will need to have legal, audit, client support, IT, and other important departments. While speaking with Hukumonline. Chief Indrasari Wisnu Wardhana of Bappebti spoke on how necessary it was to impose the regulations.
“We want to give protection to people who want to invest in crypto assets so that they aren’t cheated by fraudulent sellers.”
The regulations laid out are actually a subset of a larger group of rules, determining the way that cryptocurrency commodity trading will take place since it impacts both the spot and futures trading. However, these regulations are not entirely well received, considering the local traders that were protesting the paid-up capital restrictions imposed as recently as Thursday.
Still, having clear-cut rules of the way that cryptocurrency will run in the country is a necessity, considering that crypto has been permitted in Indonesia since 2014. Still, even with the way that Indonesia has opened up the door for using virtual currency as a commodity, that classification still prevents Bitcoin and altcoins from being used as payments.
One of the top executives at the primary bank in Indonesia, Onny Widjanarko, said that the bank was part of the committee that made the decision to classify crypto as a commodity, rather than another type of asset. This decision still does not undo the original ruling against crypto as payment, says Widjanarko. In a statement to CNBC Indonesia on Friday, he said,
“BI still prohibits bitcoin or crypto as a means of payment. Commodities regulation is not an area of concern for the BI.”