Crypto in Indonesia

Indonesia's crypto regulatory framework is bifurcated: Bank Indonesia (BI) prohibits cryptocurrency as a means of payment under Law No. 7/2011 and BI Regulation No. 18/40/PBI/2016, while Bappebti (the Commodity Futures Trading Regulatory Agency) classifies crypto as a tradable commodity under Regulation No. 5/2019, effective May 2019. This dual approach allows trading but not payments. In December 2022, Law No. 27/2022 on Financial Sector Development and Strengthening (P2SK) mandated a transfer of crypto oversight from Bappebti to the Financial Services Authority (OJK) and Bank Indonesia. The transfer is scheduled to complete by January 2025, with OJK assuming regulatory authority over crypto assets. Currently, crypto exchanges must register with Bappebti as futures exchanges; as of 2024, only 35 exchanges are licensed, including Indodax and Pintu. Bank Indonesia is also researching a central bank digital currency (CBDC), the Digital Rupiah, under Project Garuda, but no launch date is set.

Indonesia taxes crypto transactions under Ministry of Finance Regulation No. 68/PMK.03/2022, effective May 1, 2022. Income tax (PPh) on capital gains from crypto trading is 0.1% of the transaction value for domestic exchanges, while value-added tax (VAT) applies at 0.11% for domestic exchanges (10% of the 11% VAT rate). For foreign exchanges, income tax rises to 0.2% and VAT to 0.22%. These rates are final and withheld by the exchange. Additionally, crypto miners and traders must report income in annual tax returns. The tax applies regardless of profit or loss, and there is no threshold exemption. The government has not introduced specific reporting requirements beyond standard tax filings, but exchanges are required to submit transaction reports to the Directorate General of Taxes. In 2024, tax revenue from crypto transactions reached IDR 1.2 trillion (approximately $75 million), reflecting growing compliance.

Indonesia has emerged as a Southeast Asian crypto powerhouse, with over 7 million registered crypto users as of 2024, according to Bappebti. Trading volume on registered exchanges surged to IDR 500 trillion ($32 billion) in 2023, a 300% increase from 2022. Retail investors dominate, but institutional interest is rising: in 2023, major local banks like Bank Mandiri and BCA began exploring crypto custody services. Use cases focus on investment and remittances; crypto is not used for payments due to the ban. The archipelago's large unbanked population (over 90 million adults) and high mobile penetration (68%) drive adoption. Popular assets include Bitcoin, Ethereum, and stablecoins like USDT. In 2024, the government launched a national crypto literacy program to educate users, aiming to double user numbers by 2025.