The crypto asset market in Indonesia is weakening. What is the solution?
JAKARTA, Indonesia, 27 October 2022 /PRNewswire/ — The crypto asset industry i Indonesia is still at the center of attention for many parties due to the development. Collected from the Commodity Futures Trading Regulatory Agency (CoFTRA) latest data per August 2022crypto-asset investors have penetrated 16.1 million customers, but on the other hand, the crypto-asset industry is also experiencing a significant decline where the total transaction value in the period from January to August 2022 was recorded at IDR 249.3 trilliondown by 56.35% compared to the same period in 2021.
The decrease in the value of crypto asset transactions since the beginning of 2022 is the impact of global economic conditions because the macroeconomic position was not good throughout the year due to the recession and challenges which led to the crypto asset industry experiencing a bear market. According to the founder and CEO of Bitocto, Milken Jonathan, the interest rate increase by the Fed (the central bank of the United States) will certainly continue to do so absorb liquidity from various assets and will continue to have an impact until pivoting occurs from the Fed. But on a micro level, one of the reasons is the tax rate i Indonesia, where trading fees on global exchangers tend to be cheaper, and some are even free for certain pairs. “With the tax rate, it is certainly difficult for local exchangers to compete and may cause capital outflows due to the tendency to trade on foreign exchangers. For that, the government may consider relaxing some rules first, given the macro situation that has such an impact,” Milken said. In addition, honorary member ABI and Telkom University lecturer Dr. Andry AlamsyahS.Si, M.Sc also added, according to Andry “Bear market conditions are repeated conditions and have occurred in the past. For the crypto industry, it is good that during bear market conditions, existing projects can focus on basic functions so that if conditions recover, the products/services offered by the project more legitimate and mature. The blessing in disguise of this bear market condition can be exploited by crypto-asset developers to be able to conduct deeper research to produce product outputs with better fundamentals.”
Chairman of Indonesian Blockchain Association (ABI), Asih Karnengsih said that bear market conditions require us to focus on activities that can strengthen the industrial ecosystem nationally because Indonesia still has great potential. So it is hoped that all stakeholders, both from government, business actors and all stakeholders can “continue to work together to protect the crypto-asset industry by improving/evaluating existing policies, such as the coin or token value system included in CoFTRA’s Positive List forward to the immediate inauguration of the Crypto Asset Exchange”.
However, amid several unresolved issues, the Ministry of Commerce through CoFTRA issued Circular (SE) No. 208/BAPPEBTI/SE/08/2022 on Termination of Issuance of Registration Permits for Candidate Physical Crypto Asset Traders (CPFAK) suspected of legal violation of norms and causing loss to CPFAK, both those who are today and those who will complete the registration process. If human beings look at other technology-based financial industries, such as electronic money operations under the supervision of Bank Indonesia and online loans under the supervision of OJK, a moratorium on the registration process has also been carried out. If human beings can use this as a reference, the development of technology and markets is actually a step ahead of the law/regulations. On the one hand, a moratorium on the licensing process can actually be considered in order to harmonize the implementing rules with the current market conditions which are completely uncertain in order to protect consumers and business operators in Indonesia.
Furthermore, several companies are in the registration process that have followed the provisions of CoFTRA Regulation No. 8 of 2021 such as capital fulfillment, business plan development, application development, compliance with security certification standards, and others which of course cause significant losses to business actors. This is absolutely contrary to the government’s spirit of expanding investment opportunities and creating new jobs Indonesia.
In the meantime, the Director of Taxation in the Ministry of Finance, Suryo Utomoso, “Taxation on crypto assets PPh 22 is the same, starting in June. This means that in the third month of June, July and August we get 125 billion IDR. PPh 22 is 60 billion IDRthis is the rate 0.5% later for the value added tax 65 billion IDR“, said Suryo at the DGT headquarters, South Jakarta, Tuesday (4/10/2022). This sum includes income from PPh 22 on transactions with cryptoassets through trading operators through electronic systems (PPMSE) and/or self-deposits. With the large contribution of crypto-asset trading to government revenue, the government should immediately lift the moratorium, or if it is necessary to maintain the moratorium, it can still allow companies that submitted a registration process before the issuance of the moratorium the right to continue the licensing process. This is certainly considered to give a sense of fairness to parties who have good intentions according to the provisions of Perba 8/2021.
In addition, the inauguration of Crypto Asset Exchange has yet to become another matter that is quite crucial in the regulatory and supervisory process carried out under the Ministry of Commerce. Although the establishment of the Crypto Asset Exchange is urgent considering that the exchange serves as a forum to oversee the trading of crypto assets in Indonesia, which was originally intended to be inaugurated by the end of 2021. Currently, there are candidates for Crypto Asset Exchange that have registered with CoFTRA and have fulfilled the material requirements of Perba 8/2021, namely PT Digital Futures Exchange (DFX). DFX Director Oham Dunggio said “in terms of preparedness, for material and technical reporting requirements we are 100% ready to operate. Furthermore, DFX is awaiting permission from CoFTRA to be allowed to fully support the growing crypto asset industry in Indonesia.”
Meanwhile, from the business side, Robby said as CCO of Reku, “Crypto Asset Exchange for the crypto industry is currently a major problem for CPFAK. Assessing the status of crypto asset traders will never be perfect because the industrial ecosystem is not yet ideal. After all, supporting institutions such as Crypto Asset Exchange have not yet been formed.”
To see the state of the crypto asset industry i Indonesiawhich is as deep as a bear market condition, recovery measures 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 problems existing in the crypto asset industry.
SOURCE Asosiasi Blockchain Indonesia
