In the culmination of several months of legislation, Indonesia declared cryptocurrencies a commodity. This move relaxes some of the more severe restrictions placed on digital currency in the Southeast Asian country. Previously, cryptocurrency exchanges could not legally operate in the country, the new laws now open trading to Indonesian citizens. However, they also introduce an array of new regulations aimed at protecting the average investor.
Indonesia remains one of the more restrictive nations within the cryptocurrency space. Despite this, they’ve seen a spike in peer-to-peer BTC trading that coincides with the loosening of their restrictions. However, the use of Bitcoin or other cryptocurrencies as a method of payment remains illegal in Indonesia. The public reasoning behind this ban states that cryptocurrencies are not issued by the Indonesian government, and therefore cannot legally be used as legal tender within the country.
Indonesia’s Current Restrictions
Despite their allowance of cryptocurrency exchanges, several caveats have made entering the space difficult. Where most countries allow smaller scale investing, the new Indonesian regulations restrict cryptocurrency trading to major institutional investors. Any brokerage wishing to get involved with futures trading must hold well over $70 million USD worth of the local currency. Individuals are expected to provide $7 million USD minimum in the form of Indonesian rupiah as capital.
Further, the restrictions on payment make it difficult for cryptocurrency start-ups and merchants wishing to get involved in the ecosystem. As it stands, cryptocurrency is only available to institutional investors – who will be unable to use the currency as anything but a speculative investment. The regulatory environment ensures that Indonesia is solidly removed from the blockchain technology revolution, and without forward thinking laws, they may soon be left behind.
The Global State of Cryptocurrency
While Indonesia continues to struggle with the legal status of cryptocurrency, other areas of the globe have no such issue. Europe continues to stand as a safe refuge from suffocating cryptocurrency laws. Officials in the majority of EU countries are hesitant to introduce regulations that could injure the nascent industry. Many European countries have embraced the technology as a means of payment and investment.
Asia is more mercurial. While the region accounts for a large portion of cryptocurrency businesses and trading, the governments are less enthusiastic. China, Japan and Korea have alternatively banned and supported different crypto-related businesses and ICOs. Singapore remains one of the blockchain capitals of the world.
Ever in current crypto-news, Venezuela remains a tragic but important use case for Bitcoin itself. Since the collapse of governmental services and the associated hyper-inflation, Bitcoin became the de facto currency of the nation. While this shows that Bitcoin can serve its intended purpose, the lack of government support for Venezuelan citizens remains worrying.
Finally, North America continues their slow march towards progress. Despite the recent QuadrigaCX scandal, Canada continues with a relatively friendly approach to blockchain businesses. The United States remains a patchwork of disparate regulations, but progress continues. The state of Wyoming recently passed legislation to attract blockchain businesses.
Article By: Adam Stone