The Indonesian Financial Services Authority (OJK) has announced that local financial services institutions introducing new products and services must be part of the regulatory sandbox to allow testing of upcoming innovations, including crypto asset products.
A report by the local Indonesian media outlet DetikFinance states that once regulated and supervised, crypto assets will need to be evaluated in a regulatory sandbox. This process will require crypto firms in the sandbox stage to undergo assessment by the regulator before being granted approval to operate in the country.
Regulatory sandboxes are used by businesses to test new products or services for a limited time to assess feasibility and potential impact.
Hasan Fawzi, the head of the country's supervision of the financial sector technology innovation, digital financial assets, and crypto assets, mentioned that including crypto assets in the regulatory sandbox aims to eradicate fraudulent investments and enhance consumer protection and education.
As part of these changes, the OJK will take over the regulation of the crypto industry starting in January 2025, shifting from the country's commodities agency, Bappebti. Indonesia currently classifies crypto assets as commodities, but under OJK's governance, there may be a reconsideration to classify them as financial instruments.
Recently, the landscape of crypto in Indonesia has been evolving, with the election of a pro-crypto candidate as the vice president in the latest presidential elections. This candidate, Gibran Rakabuming Raka, has shown support for preparing experts in the fields of blockchain, crypto, artificial intelligence (AI), and cybersecurity to empower local youth in the digital realm.
Indonesia also launched its national crypto exchange, the Indonesian Crypto Asset Futures Exchange, which is monitored by local regulators and serves as the primary platform for the legal exchange of digital assets in the country. Additionally, the country has initiated blockchain trials in public services.
In response to the growing crypto industry, Indonesian officials are considering changes to its existing dual taxation system on crypto assets, urging a reevaluation of the current 0.1% capital gains tax and 0.11% VAT on crypto transactions.
