The Indonesian Financial Services Authority (OJK) said that local financial services institutions offering new products and services must be included in the regulatory sandbox or leave room for testing upcoming innovations, including crypto asset products.
According to a report by local Indonesian media outlet DetikFinance, once regulated and supervised, crypto assets will also need to go through a regulatory sandbox in the future.
This means crypto firms in the sandbox stage will have to be evaluated by the regulator before being approved to operate in the country.
Regulatory sandboxes are typically tools for businesses to test and experiment with new innovative products or services for a limited period.
Hasan Fawzi, the head of the country’s supervision of the financial sector technology innovation, digital financial assets and crypto assets, said that crypto assets have been included in the regulatory sandbox in an effort to eradicate fraudulent investments.
“I think this is our spirit at OJK, especially in consumer protection and education. We really hope that all of our regulatory mechanisms will be present and have a direct impact on preventing fraudulent investments.”
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As a part of this announcement, the OJK will take over regulation of the crypto industry starting in January 2025. Currently, it is under the jurisdiction of the country’s commodities agency, known as Bappebti.
Indonesia classifies crypto assets as commodities, though when moved to OJK’s governance, it is speculated that they may be reconsidered as financial instruments.
The crypto landscape in Indonesia has been heating up over the last year, with a pro-crypto candidate elected vice president in the most recent presidential elections.
During his election campaign, Gibran Rakabuming Raka vowed to prepare blockchain, crypto, artificial intelligence (AI) and cybersecurity experts that would encourage local youth in the digital space.
In 2023, the country launched its landmark national crypto exchange — the Indonesian Crypto Asset Futures Exchange — monitored by local regulators.
It serves as the country’s sole platform for the legal exchange of digital assets. It has also begun conducting blockchain trials in public services.
Earlier in March, Indonesian officials were reportedly considering changes to its dual taxation on crypto, urging a reevaluation of the country’s current 0.1% capital gains tax and 0.11% VAT on crypto transactions.
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