Starting January 2025, cryptocurrency firms in Indonesia will be subjected to a novel pre-licensing process within a regulatory sandbox, as announced by the Financial Services Authority (OJK). This move comes as part of a transition, transferring industry supervision from the commodities and futures trading regulator, Bappebti, to OJK, reflecting a significant shift in the regulatory landscape of digital financial assets and cryptocurrencies in the country.
During a media briefing, Hasan Fawzi, the head of supervision for financial technology, digital financial assets, and crypto at OJK, emphasized the organization’s commitment to consumer protection and education. Fawzi highlighted the sandbox’s role in preventing fraudulent investments, stating, “We expect our regulatory mechanisms to directly impact the prevention of fraudulent investments.” He outlined that crypto firms operating without undergoing evaluation in the sandbox would be deemed illegal, underscoring the stringent stance the regulator plans to adopt.
The regulatory sandbox is designed to function as an experimental framework where crypto firms can test their products in a controlled environment. This setup is aimed at ensuring the safety, reliability, and compliance of financial technologies before they are officially launched in the market. By facilitating these trial runs, the sandbox is expected to foster innovation while simultaneously bolstering security and responsible management within the financial sector.
Currently, cryptocurrency assets are classified as commodities and overseen by Bappebti. However, with the transition of supervisory duties to OJK, crypto assets are likely to be reclassified as financial instruments. This reclassification marks a pivotal change in how crypto assets are perceived and regulated, potentially impacting a wide range of stakeholders from investors to service providers.
Hasan reiterated the sandbox’s significance in acclimating crypto businesses to the regulatory frameworks and supervisory practices of OJK. This initiative is part of a broader strategy to integrate digital financial assets into Indonesia’s regulatory regime responsibly. By mandating sandbox evaluation before licensing, OJK aims to ensure that only compliant, transparent, and secure crypto services operate, safeguarding investor interests and enhancing the overall integrity of Indonesia’s financial system. This approach underscores Indonesia’s cautious yet progressive stance towards embracing financial innovation while prioritizing consumer protection and financial stability.
