The Indonesian Commodity Futures Trading Supervisory Agency (Bappebti), which operates under Indonesia’s Ministry of Trade, has officially required multiple entities involved in crypto futures trading to seek regulatory approval and apply for registration before legally operating in Indonesia.
The news follows the recent release of legislation that officially recognizes Bitcoin (BTC) and other digital assets as trading commodities. The Bappebti first greenlighted crypto trading as a commodity on Indonesian stock exchanges back in June 2018.
The new regulatory framework is based on a number of major rules for futures market operations, including regulation on the adoption of crypto as a tradable commodity on futures exchange markets, as well as technical provisions for placing crypto futures contracts on exchanges.
The new rules require both futures exchanges and clearing houses that offer crypto futures trading to pay at least 1.5 trillion Indonesian rupiahs (IDR) or $106 million, as well as maintain a closing capital balance of at least 1.2 trillion IDR ($85 million), according to international law-focused media agency Lexology.
The rules also affect crypto futures traders and storage service providers, requiring both to maintain at least 1 trillion IDR ($71 million) and a minimum closing balance of 800 billion IDR ($57 million) before they can become officially approved to trade crypto futures.
The regulation demands crypto futures exchanges to ensure compliance with security policies, requiring at least three staff members to be acquire Certified Information System Security Professionals (CISSP) certification. The entities should undergo risk management procedures, including compliance with Anti-Money Laundering (AML) and combating terrorism financing policies.
The new regulation was established in order to provide legal certainty around the crypto futures trading field, as well as to protect investors, as Head of Bappepti Indrasari Wisnu Wardhana stated, stressing that commodities futures trading intends to provide the ecosystem with support in the development of digital innovative business models.
While the latest document confirms crypto as being an officially accepted tradable commodity on the futures market, Bitcoin still remains banned from being used as payment in Indonesia, following a ban imposed in 2017 by Indonesia’s central bank. According to Lexology, the regulation stressed that the new regulatory scheme cannot be applied to initial coin offerings (ICOs).
Recently, Indonesia’s crypto trading volumes have surged significantly, with Bitcoin trading volumes reaching around $730,000 on peer-to-peer (P2P) exchange LocalBitcoins during the week ending Feb. 16, according to data from Coin.Dance.
Indonesia LocalBitcoins weekly trade volumes in BTC. Source: Coin.Dance
Recently, Cointelegraph reported that crypto traders have negatively assessed the Indonesian regulators’ decision to set a capital requirement of $70 million in order to launch futures trading.
Oscar Darmawan, CEO of local crypto exchange Indodax, recently told Reuters that the sums required are even bigger than the cost of opening a rural bank.