Crypto firms must face sandbox evaluation before operating: Indonesian gov’t

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Amid cryptocurrency’s rise in popularity in Indonesia, a major regulatory change is imminent. The Financial Services Authority (OJK) has announced that all crypto firms seeking to operate in Indonesia will have to pass a mandatory evaluation in a regulatory sandbox.

The move comes as OJK prepares to take over crypto supervision from the Commodity Futures Trading Supervisory Agency (Bappebti) in January 2025. It also comes on the heels of Indonesia’s tightening supervision of tech companies – most recently, the government threatened to block online travel agents (OTAs) that have not registered as electronic system providers.

Hasan Fawzi, OJK’s head of financial technology supervision, emphasized the importance of safeguarding consumers and promoting informed investment decisions. The sandbox will ensure the safety and reliability of crypto services before firms receive full regulatory approval.

Companies operating without OJK’s clearance will face legal consequences. The move also suggests that under OJK, crypto assets will be treated as financial instruments, rather than commodities under Bappebti.

In Indonesia, cryptocurrency has risen in popularity. Total crypto transactions reached a remarkable US$1.92 billion last month, while the number of registered investors swelled to 19 million – with 170,000 new users came in January 2024 alone, Bappebti reported.

Aside from OTAs, TikTok Shop notably found itself banned in late 2023, which would be reversed following its acquisition of local ecommerce giant Tokopedia. Earlier that year, the government also announced plans to ban the sale of imported goods priced below US$100 on ecommerce platforms.

Meanwhile, outgoing President Joko Widodo recently issued a presidential decree that would require platforms like Meta and Google to compensate news publishers.

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