As regulatory measures are established around the world, every country is trying to determine the definitions and the usage of various cryptocurrency products. While many consumers have been happy about the welcoming atmosphere that these regulatory measures have created, locals in Indonesia could not be more upset.
With newly imposed rules on futures trading, the development of the market will be largely impeded, as the rules now outline a high minimum capital for the transactions.
Right now, cryptocurrency is not widely welcomed in Indonesia as a payment instrument. However, they have been more welcoming to blockchain technology, which is why blockchain-based assets and their trading is allowed.
In Jakarta, futures trading of crypto has been allowed since October, offering hedging tools that keep customers from becoming victims of fluctuating prices. Unfortunately, no digital asset has been a part of futures transactions yet, according to local traders.
The Commodity Futures Trading Regulatory Agency, better known locally as Bappebti, decided that the minimum capital for new traders in future contracts involving crypto is set at 1 trillion rupiah ($71.17 million). The goal of the minimum is to encourage more trading while protecting customers.
However, Indodax’s Oscar Darmawan, a chief executive, has pointed out that the capital level is even higher than the minimum for opening a rural bank. It is also is higher than the minimum paid-up capital imposed upon futures brokers of other commodities, which is 2.5 billion rupiah.
Darmawan adds that the whole point of regulation, as many other economies have followed, is to help stir the economy and protect the citizens from potential harm. However, “it should not kill an industry,” he says, which is exactly what the harsh capital minimum is doing.
The chief operating officer for Tokocrypto, Teguh Kurniawan Harmanda, commented that the decision to impose a high limit on the capital for futures trading was rather surprising. He added that there was no indication that it would be set so high, considering that it hadn’t come up in Bappebti meetings before the regulation way released. However, at this point, the Bappebti officials have not commented further on the matter.
Along with the capital minimums, the rules will also require that traders have a client support division, that they have a certified security practitioner on staff, and that transaction history must be kept for 5 years. A server for their platform must be operating within the country, which means that companies and traders with outside offices cannot operate without an office in Indonesia.
Right now, there is no complete data indicating how big the crypto market is in Indonesia. However, participants estimate that the crypto market is just as big as the traditional stock market. Darmawan said,
“We are seeing almost 3,000 new members signing up every day. Most people are trading in bitcoins, though transactions in Ethereum has increased significantly as of late.”