The crypto asset market in Indonesia is weakening. What is the solution?
Jakarta, Indonesia, October 27, 2022 /PRNewswire/ — The Crypto Asset Industry in Indonesia is still in the focus of many parties due to its development. Compiled from the latest data from the Commodity Futures Trading Regulatory Agency (CoFTRA) at August 2022crypto asset investors have penetrated 16.1 million clients, but on the other hand, the crypto asset industry is also witnessing a significant decline where the total value of transactions during the period from January to August 2022 was recorded at IDR 249.3 trilliondown 56.35% compared to the same period in 2021.
The decline in the value of crypto asset transactions since the start of 2022 is the impact of global economic conditions as the macroeconomic position has not been good throughout the year due to the recession and challenges which caused the crypto asset industry to experience a bear market. According to the founder and CEO of Bitocto, Milken Jonathan, the increase in interest rates from the Fed (the central bank of United States) will certainly continue to absorb liquidity of various assets and will continue to impact until pivoting occurs from the Fed. But at the micro level, one of the reasons is the tax rate Indonesia, where trading fees on global exchanges tend to be cheaper and some are even free for certain pairs. “With the tax rate, it is certainly difficult for local exchangers to be competitive and may cause capital outflows due to the tendency to trade on foreign exchangers. For this, the government may consider relaxing some rules first, given the macro situation that has such an impact,” said Milken. Additionally, ABI Honorary Fellow as well as Telkom University lecturer Dr. Andry AlamsyaS.Si, M.Sc also added, according to Andry “bear market conditions are repeating conditions and have happened in the past. For the crypto industry, it is good that during bear market conditions, existing projects can focus on fundamental functions so that if conditions recover, the products/services offered by the project are more legitimate and mature The blessing in disguise of this bearish market condition can be used by asset developers to be able to conduct further research to produce products with better fundamentals.
The President of the Indonesian Blockchain Association (ABI), Asih Karnengsih, said that the bear market conditions force us to focus on activities that can strengthen the industrial ecosystem nationwide, because Indonesia still has great potential. It is therefore hoped that all stakeholders, both from government, commercial actors and all stakeholders, can “continue to collaborate to protect the crypto asset industry by improving / evaluating existing policies, such as the system valuation of coins or tokens included in the CoFTRA Positive List until the immediate inauguration of the Crypto Asset Exchange”.
However, during several unresolved issues, the Ministry of Commerce through CoFTRA issued Circular (SE) No. 208/BAPPEBTI/SE/08/2022 regarding termination of issuance of registration permits for Candidates for Traders in Physical Crypto Assets (CPFAK) which is suspected of violating legal standards and causing losses to CPFAK, both those who are currently and those who will conduct the registration process. Whether people look at other technology-based financial industries, such as e-money operations under the supervision of Bank Indonesia and online lending under the supervision of OJK, a moratorium on the registration process has also been put in place. Whether people can use it as a reference, the development of technology and markets is indeed one step ahead of the law/regulation. On the one hand, a moratorium on the licensing process can indeed be considered to bring the implementation rules into line with the current market conditions which are totally uncertain in order to protect consumers and commercial actors in Indonesia.
In addition, several companies are in the process of registration that have complied with the provisions of CoFTRA Regulation No. 8 of 2021 such as capital realization, development of business plans, development of applications, compliance with security certification standards, and others which of course cause material losses for commercial actors. This is certainly contrary to the government’s spirit of expanding investment opportunities and creating new jobs in Indonesia.
For his part, the Director General of Taxes at the Ministry of Finance, Suryo Utomosaid, “The taxation on PPh 22 crypto assets is the same, starting from June. This means that in the third month of June, July and August, we get IDR 125 billion. PPh 22 is IDR 60 billionthis is the 0.5% later rate for VAT IDR 65 billion“, said Suryo at the headquarters of the DGT, South Jakarta, Tuesday (10/04/2022). This total includes PPh 22 revenue from transactions of crypto assets through trading operators via electronic systems (PPMSE) and/or automatic deposits. With the great contribution of crypto asset trading to state revenue, the government should immediately lift the moratorium or if there is a need to maintain the moratorium, it can still allow companies that have undergone a registration process before the issuance of the moratorium the right to continue the licensing process. This is certainly seen as bringing a sense of justice to parties who have good intentions by following the provisions of Perba 8/2021.
Moreover, the inauguration of the Crypto Asset Exchange has yet to become another crucial enough issue in the regulatory and supervisory process conducted under the Ministry of Commerce. Even though the creation of the Crypto Asset Exchange is an emergency given that the Exchange functions as a forum to oversee the trading of crypto-assets in Indonesia, which was originally scheduled to be inaugurated by the end of 2021. Currently, some Crypto Asset Exchange applicants have registered with CoFTRA and have met the background requirements following Perba 8/2021, namely PT Digital Futures Exchange (DFX) . DFX Director Oham Dunggio said “In terms of readiness, for substantive and technical reporting requirements, we are 100% ready to operate. Additionally, DFX is awaiting clearance from CoFTRA to be allowed to support fully the growing industry of crypto assets in Indonesia.”
Meanwhile, on the business side, Robby, as Reku’s CCO, said, “Crypto Asset Exchange for the crypto industry is currently a major issue for CPFAK. Considering the status of crypto asset trader will never be perfect because the industry ecosystem is not yet ideal. support such as Crypto Asset Exchange have not yet formed.”
Seeing the state of the crypto asset industry in Indonesiawhich is as deep as a bear market condition, recovery efforts are needed to maintain the stability of the crypto asset trading ecosystem in Indonesia. ABI and the entire ecosystem hope that the government will immediately plan various decisive actions and swift actions against various issues that exist in the crypto asset industry.
SOURCE Asosiasi Blockchain Indonesia