Indonesia’s crypto market braces for stricter regulation

The Indonesian crypto market is unlikely to improve in 2023, with investors braced for another difficult year amid a new regulatory environment.

The global cryptocurrency market capitalisation evaporated by more than 60 per cent over the past year to around US$800 billion, CoinMarketCap data show. Several crypto exchanges have filed for bankruptcy, including the most notable exchange FTX.

In line with this bearish trend, the transaction value of crypto assets in Indonesia fell by more than 65 percent to around Rp 300 trillion ($19.1 billion) in 2022, from Rp 859 trillion the previous year, Commodity Futures Trading Regulatory Agency (Bappebti) data show.

Bappebti expected the value of crypto assets, especially cryptocurrencies to continue declining this year, albeit at a much slower rate, as it has already gotten close to the bottom, but the agency noted it would take quite a long time before it could make a significant rebound.

"We will continue facing extraordinary challenges in cryptocurrencies in 2023," Acting Bappebti head Didid Noordiatmoko told an audience during a briefing on Wednesday.

Cryptocurrencies had attracted massive popularity in Indonesia and many parts of the world since the pandemic began.

In Indonesia, there were more than 16.5 million cryptocurrency investors as of November last year, surpassing total investors in the capital markets, which only numbered 10 million in the same month, authorities' data show.