JAKARTA (TheInsiderStories)—Indonesia government will allow cryptocurrencies as futures commodities that can be traded in the stock exchange, said the Market Supervision and Development Bureau of the Trade Ministry’s Futures Exchange Supervisory Board Dharma Yoga .
“The decision was taken after Bappebti [the Trade Ministry’s Futures Exchange Supervisory Board] conducted a study for the last 4 months,” he said, as quoted by Kontan on Tuesday (05/06).
Furthermore, the government will make further regulations on the establishment of cryptocurrencies as a commodity. Various ministries and institutions such as Bank Indonesia (BI) and the Financial Service Authority will be involved in the process of issuing regulations.
The Ministry of Trade also will discuss with the Directorate General of Taxation to arrange the tax issues in cryptocurrencies trading. Furthermore, the Financial Transaction Reports and Analysis Center and National Police’s Elite Counterterrorism Squad will be invited to discuss the prevention the use of cryptocurrencies in the money laundering, financing the terrorism, and other crimes.
The further regulation also will arrange the deposit of the customer funds to prevent frauds and hacking risks. Yoga said the fund will not be kept by the cryptocurrencies companies but by deposit bank that already exists in the Trade Ministry’s Futures Exchange Supervisory Board.
In addition, the government also asked existing cryptocurrencies companies such as Indodax and other cryptocurrencies communities to create proposals to detail contracts, product specifications, and trade procedures.
The legalization of cryptocurrencies in the stock exchange contradicts with the central bank who does not recognize the virtual money as a legal tender. BI payment system policy department head Onny Widjanarko earlier said the cryptocurrencies potentially creates a risk of bubble that will affect the financial system stability.
In addition, there is also the risk of regulatory arbitrage because transactions can be made from other countries with more accommodative provisions.
“We warn users to be careful not to buy and sell because of risks not only for themselves but also for financial system stability,” he said.
The cryptocurrencies communities in Indonesia grow rapidly during recent years. The biggest Indonesian platform to buy and sell digital currency, Digital Asset Exchange, has 1.14 million investors with a total transaction of Rp1 trillion per day in March 2018.