is Targeted for Mid-2023
Indonesia’s State-Backed Crypto Exchange Targets Mid-2023
According to Indonesia’s Commodity Futures Trading Regulation Agency (Bappebti), the country plans to launch its highly anticipated state-backed crypto exchange in mid-2023.
Didid Noordiatmoko is the head of Bappebti and stated that the new exchange would be in place by mid-2023. Bloomberg reported. He stated that the exchange would be managed by a private company and not the government.
While the state plans to create a crypto exchange, it comes at a time when the digital asset industry is still rife in fraud and scams. According to reports, the crypto industry lost $4 billion in digital assets to fraud, hacks, scams and rug pulls by 2022. Five major exploits amounted to $2,361,000,000 each.
A number of prominent crypto companies declared bankruptcy last year, causing billions in losses for retail customers. FTX and Zipmex, based in Singapore, were among the notable crypto exchanges to fail last year.
The new state-backed crypto exchange’s blueprint is similar to stock markets. It separates trading, clearing and custodial under official supervision. Once the exchange is established, trades will be executed by private-sector cryptocurrency platforms.
Noordiatmoko stated that “the hard part is that we can’t locate a benchmark for such crypto bourse.” He said, “This could be a first.” Other state-backed entities would handle clearing and custody in order to protect customer assets and avoid any repeat of the alleged fraud like FTX.
The Indonesian government was in power in September 2001, before the chaos of FTX. Introduced Revisions were made to tighten regulations on crypto exchanges in the nation, stating that at least two-thirds “must” be Indonesians living in the country.
Other revisions were made by the Indonesian authorities. The government stated that local crypto exchanges must store client funds in third party bank accounts. The government also prohibited crypto exchanges from investing in crypto assets.
It is important to note that crypto interest has been growing rapidly in Indonesia. Bappebti reports that crypto asset transactions amounted to 859.4 trillion rupees (worth approximately $57.7billion) in 2021. This is an increase of 1,224% over the 64.9 trillion recorded in 2020.
The country was also ranked 20th among 146 economies in 2022 global crypto adoption Index from Chainalysis. Chainalysis is a New York City-based blockchain analysis firm.
However, the country’s cryptocurrency sector has been severely affected by recent events. CryptoCompare data shows that trading volumes for monthly have plummeted 95% to $233 Million last month, down from $4.7 Billion in May 2021.
Experts believe that the new crypto stock exchange will give Indonesian crypto adoption a boost. Pang Xue Kai (CEO of Tokocrypto), previously stated that the industry would grow and that more projects will be created in Indonesia.