Should the world replicate Indonesia’s national crypto bourse?

Two years ago, Indonesia decided to address problems that were rampant in Web3: scams and fraud. In the process, it did what no other country has yet done: establish a Nasdaq-style exchange called CFX (Central Financial X), designed specifically for digital assets.

Subani, the president director of CFX, now wants to take the next step.

“CFX’s near-term plan is to push innovation and the development of crypto derivative products,” Subani tells Tech in Asia. “Crypto derivatives function as a hedge, so when the spot price of crypto assets fluctuates, derivative transactions continue to provide a way to take hedging positions.”

CFX president director Subani / Photo credit: CFX

Launched by the government in July 2023, the bourse oversees and records all crypto asset trading transactions in Indonesia. Crypto exchanges are required to register with CFX to obtain an operating license from the Financial Services Authority (OJK) – the regulator tasked with overseeing crypto assets in the country.

Currently, 31 platforms have registered with CFX, of which 20 have received full licenses, while the rest are still securing their licenses.

Models like CFX are seen as potentially valuable in markets that lack comprehensive crypto regulations or ban them outright. A national crypto bourse can offer greater clarity and investor confidence, according to many of the analysts that Tech in Asia spoke with.

However, critics argue that a centralized bourse undermines the spirit of decentralization that permeates the crypto ecosystem. This contradiction raises questions about how useful a bourse like CFX can be.

Undermining decentralization?

For Subani, CFX is not meant to centralize trading but to ensure transparency, accountability, and investor protection.

He says the system is designed so that users only bear investment risks. Unlike traditional bourses, CFX doesn’t directly host trades or handle customer funds.

“Trading still takes place on each exchange platform,” Subani explains. “So we don’t interact directly with customers.”

Photo credit: CFX

Industry observers acknowledge the philosophical tension between a government-linked crypto bourse and decentralization. Alexis Sirkia, chairman of blockchain infrastructure firm Yellow, notes that centralized oversight challenges principles like permissionless participation and user sovereignty, which are core to crypto.

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