Indonesia is the largest Muslim-majority country with crypto traders outnumbering regular trading, but the government refuses to support the industry. Now the Indonesian Commodity Futures Trading Regulatory Agency (BAPPEBTI) has shown a negative stance towards crypto futures trading by imposing harsh conditions on it.
Indonesias new rules on futures trading, which require high minimum capital for traders, will hinder development of the young but growing market. Government now expects crypto asset traders (cryptocurrency exchange, etc) to have at least $70.13 million (one trillion rupiah) in capital and an additional $5 million on deposit.
Oscar Darmawan, chief executive of major digital asset trader Indodax, said the “very large” minimum capital level is more than the requirement for opening a rural bank and much higher than the 2.5 billion rupiah minimum paid-up capital for a futures broker of other commodities.
Regulation is needed to support a sector, help the economy and protect people “but it should not kill an industry,” Darmawan said.
The new capital requirements caught everyone off-guard and are going to cause huge obstacles for FinTech innovation in the country. The CEO of the Tokocrypto trading firm, Teguh Kurniawan Harmanda, adds that no one had been given prior notice of the new rules, and that the subject never came up during industry consultations that had been held by the government prior to the publication of the regulations.
By the way since October, Jakarta has allowed futures trading of cryptocurrencies as a way to provide hedging tools to protect customers from fluctuations in prices of cryptocurrencies. But there have been no futures transactions for any digital asset so far, according to traders.