Indonesia Oppress Crypto Industry With Tough Futures Regulation

Wilfred Michael 

Wilfred Michael

News reporter

14 February 2019,
10:36
Indonesia Oppress Crypto Industry With Tough Futures Regulation

The past twelve months have primarily been for regulation of the cryptocurrency industry in different regions which at one time, banned the use of the innovative payment method.

Among those regions was Indonesia who in October 2018 created a framework that banned the usage of cryptocurrencies for payment, but allowed citizens to trade it on exchanges.

Despite that development, a Feb 14 Reuters report suggests that securities authorities in the country may still be unhappy with the government’s decision to allow crypto trading and as such are planning to stifle the growth of the emerging industry.

Last week the Indonesian Commodity Futures Trading Regulatory Agency, known as Bappebti, released the following as capital requirement for cryptocurrency platform who wish to offer a Futures contract to natives:

  • One trillion rupiahs ($71.17 million) of which 800 billion rupiahs ($56.7 million) will be set aside as deposit.

For individuals offering such as futures contract, Jakarta Post reports that the minimum operating capital stipulated by the regulators is:

  • One hundred billion rupiahs ($7.13 million) of which 80 billion rupiahs ($5.7 million) will be set aside as deposit.

Undoubtedly, these capital requirements already look too expensive to be met by participants in a relatively new industry.

Oscar Darmawan, CEO in local cryptocurrency exchange, Indodax went further to confirm that the stipulated capital threshold is more than what regulators require from companies who are setting up rural banks.

Also, it is well over the 2.5 billion rupiahs ($177,400) minimum requirement for exchanges that offer futures trading contract for traditional commodities.

He concluded that although the regulators had slapped those high requirements to protect investors, it could as well ‘kill the industry,’ unless it is amended in due course.

Other industry participants also slammed the high capital requirements and looked set to consult Bappebti for a review since the regulators never held any discussions about it with them, before enacting the rules.

Meanwhile, Indonesia's neighbors, India have stalled plans to legalize cryptocurrencies for fear that it will overtake its fiat currency, Rupees.

 

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