Indonesia’s Regulator Banned Financial Firms from Offering Crypto Sales

The government of Indonesia has been taking preventive methods to stop the cryptocurrency industry from growing in the region. Recently, the central financial regulatory authority has issued a warning for the local financial enterprises from entertaining any sort of digital currencies as a mode of payment. The warning was officiated by Financial Services Authority.

According to a recent report from Reuters, the number of cryptocurrency investors has kept increasing in the South Asian peninsula. To this end, the financial regulators of Indonesia have taken stringent measures to discourage the further growth of the digital asset industry in the region. Furthermore, the religious leaders of the country have also issued fatwas against crypto trading.

The central financial authority of Indonesia is not the first country to take precautionary measures towards the cryptocurrency industry. Other countries in the region like Thailand and Singapore have also adopted the same stance towards the nascent industry. According to the regulators of Indonesia, they are trying to warn the new investors about the risks of cryptocurrency investment.

Indonesian authorities are also trying to share the warnings about the cryptocurrency projects that have been flagged as suspicious or Ponzi Schemes. There have been incidents where the new investors delve into the crypto projects by reading misleading advertisements or claims on social media platforms. In the same vein, the Indonesian government is also taking steps to discourage falsified advertisements and misleading marketing campaigns in the region.

Despite the swift response from government officials, the cryptocurrency industry has kept growing exponentially in the region for the last two years. On-chain analytics reveal that in 2019, the annual trading volume from Indonesia was around 60 trillion rupiahs, while for 2021, it reached 859 trillion or $60 billion.

However, the main reason for the traction of cryptocurrencies is that financial regulators have greenlit crypto trading as a commodity. The commodity exchanges offering cryptocurrencies are regulated by the Commodity and Futures Trading Regulatory Agency and Trade Ministry. Recently, Indonesians have been looking forward to the Digital Futures Exchange that will increase interest in the options trading for digital currencies and potentially complement the annual trading volume.