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Daily Digest | Indonesia hashes out crypto future

Written by The Uptake Published on   2 mins read

Will crypto acceptance in Indonesia reshape the country’s financial future?

Hi there. It’s Brady again.

One thing that our team has been following is how people in Southeast Asia are getting into crypto. We know that more individuals are trading cryptocurrencies than stocks in Indonesia, and here are the latest numbers from the country’s Ministry of Trade: In the first five months of 2021, 6.5 million Indonesians bought and sold crypto (versus 2.2 million people who traded stocks in March). Between January and May, transaction volume shot up by 470% to hit IDR 370 trillion, or USD 25 billion.

In Jakarta, my colleague Ursula dug into this. With coins being more popular than conventional financial instruments, Indonesia’s authorities seem to be probing how to strike a delicate balance to regulate decentralized finance. In all, 229 cryptocurrencies are deemed legal in the country, and the trade minister believes “crypto assets have enormous potential to help boost the growth of domestic startups.”

That’s a striking statement to come from a public official. In many parts of the world, governments are experimenting with (centralized) digital currencies or examining their potential. While Indonesia’s regulators set boundaries for decentralized finance and monetary movements, the central bank is also developing a digital rupiah, as my colleague Khamila reported earlier in the month. Might Indonesia show the way to a balanced, equitable condition in Southeast Asia?

Where decentralized finance will function—and how—remains an open question.  What’s certain is this: We’re still a few years away, and these developments will surely move slowly, but the way people store and save money will likely see sea changes in the near future.

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