Indonesia's Crypto Industry In 2021: Kaleidoscope

The Indonesian cryptocurrency market and industry has experienced remarkable growth in 2021.

Indonesia's Crypto Industry in 2021: Kaleidoscope

By 2021, the number of global crypto holders is estimated to have grown by 3.9% to over 300 million crypto users worldwide, with over 18,000 businesses already accepting crypto payments. . India currently leads with 100 million users, followed by the US with 27 million and Russia with 17 million.

According to data from Triple A, Indonesia has the seventh largest crypto user base, after Brazil and Pakistan. An estimated 7.2 million Indonesians own cryptocurrency, while according to the Indonesian Blockchain Association, as of July 2021, the number of crypto owners in Indonesia is 7.4 million, an increase of 85%. compared to 2020. This is significantly more than the number of stock investors in Indonesia with only 2.7 million investors, based on data from the Indonesia Stock Exchange.

Indonesia's Crypto Industry in 2021: Kaleidoscope 7

Indonesia’s total population in June was 272 million, which means that only 2.7% of the Indonesian population owns cryptocurrency. This shows that there is still a lot of room for the cryptocurrency industry to grow, develop and reach more corners of Indonesian society.

The rapid growth of crypto investors in Indonesia is partly a result of the fact that Indonesian regulators have welcomed the development of cryptocurrencies and blockchain with open arms. Throughout 2021, there have been many discussions with officials, new regulations on cryptocurrencies, and developments in the field.

Indonesia's Crypto Industry in 2021: A 9 . Kaleidoscope

According to Dhila Rizqia, head of growth at local industry media company Coinvestasi, the growing number of Indonesian crypto investors is also reflected in the rise of media outlets. electronic money. “In 2021, Coinvestasi gained a lot of new audiences on our channels including Instagram and YouTube which grew by more than 1,787% and 1.388% respectively.”

2021 is an incredible year for cryptocurrencies, in this article we will look at the hottest trends in the Indonesian crypto industry last year.

Whitelist of legal digital assets

Bitcoin (BTC) is legal in Indonesia as a commodity and can be traded on cryptocurrency exchanges. Earlier this year, the Commodity Futures Trading Regulatory Authority (BAPPETI) issued a whitelist of crypto assets that are legal to trade in Indonesia.

This whitelist includes 229 crypto assets, including Bitcoin, Ether (ETH), Polkadot (DOT), Cardano (ADA), and the popular Dogecoin (DOGE) memecoin, which are allowed to be traded on established exchanges. registration.

These crypto assets were selected according to two methods: The first approach was a legal approach that looked at the top 500 coins based on market capitalization in line with the provisions of the 5 Year No. 2019.

The second is through a hierarchical analysis process, in which BAPPEPTI evaluates aspects of security, profiles of founders and developer teams, blockchain system governance, blockchain system scalability, its verifiable route and progress.

Taxation of Cryptocurrencies

With the growth of crypto users and investors in Indonesia, the government, through BAPPEBTI and the Director General of Taxation, is also considering imposing taxes on crypto trading. Currently, the taxation of cryptocurrencies is still being discussed with some market players such as exchanges and industry associations.

BAPPEBTI has stated that the cryptocurrency tax in Indonesia can be around 0.05%, which is lower than the 0.1% tax applied to stock trading.

Meanwhile, the government has reportedly begun discussing an income tax rate for investors in crypto assets of 0.03%.

Cryptocurrency is haram

The question of whether Bitcoin and crypto-assets are halal (allowed) or haram (prohibited) under Islamic law has been a heated and longstanding debate. As a country with a majority Muslim population, this topic is of particular importance to Indonesia.

In October, the East Java branch of one of Indonesia’s largest Muslim organizations ruled that while the government can approve cryptocurrencies, they cannot be considered halal “based on certain balances.” Reminder, including the prevalence of fraud, it is illegal.”

Less than a month later, the National Ulema Council (MUI) – Indonesia’s leading Islamic academic body – found that cryptocurrencies were being mixed up due to alleged factors of “uncertainty, wagering and cause harm”.

Furthermore, trading cryptocurrencies as a commodity/digital asset does not meet other requirements of Islamic financial law because according to the MIU, it lacks the necessary elements such as having a physical form. , has value, is owned and is transferable to the purchaser.

NFT finds celebrity support for governor

The development of non-usable tokens (NFTs) in Indonesia started in 2021, especially after Ridwan Kamil, Governor of West Java, started the trend by invite artists from West Java to create and promote their art as NFTs traded on NFT platforms like OpenSea.

Indonesian singer Syahrini sold 17,800 NFT for 20 Binance USD (BUSD) or about 286,300 Rupees/NFT on the Binance NFT exchange, giving the singer a total income of around 5.1 billion Rupees, or 356,000 USD.

There is also chef Arnold Poernomo, a celebrity chef who has also created his own NFT and promote it’s on Twitter.

Token Exchange

Exchange-issued tokens such as Binance Coin (BNB) and FTX Token (FTT) can be used by holders to receive exchange-provided benefits such as deposit discounts, with no fees withdrawals, opportunities to participate in promotional activities, etc.

Local Indonesian exchanges start issuing their own such tokens in 2021, with Tokocrypto releasing Toko Token (TKO) in partnership with Binance on Binance Launchpad. Year-to-date, TKO has increased by more than 1,000%.

Domestic crypto exchange PINTU launched its Pintu Token (PTU) in November, now available on various exchanges like Bybit and FTX and also backed by top investors like Lightspeed, Coinbase and Pantera.

With two local exchanges launching their own native tokens in 2021, it will be interesting to see if other exchanges like Indodax, Rekeningku or Triv follow suit in 2022.

Binance partners with the largest telecom company in Indonesia

To limit the year Binance partnered with a subsidiary of Telkom Indonesia, MDI Ventures, to create a new exchange.

In the partnership, Binance will provide the infrastructure and asset management technology to support the development of the crypto-asset exchange platform, which will be a joint venture between the two companies.

Donald Wihardja, CEO of MDI, says that the partnership will help advance cryptocurrencies and blockchain, which he believes are the financial systems pictured.

With a friendly regulatory atmosphere, support and partnerships from global crypto companies, and a growing interest in digital asset trading, it will be interesting to see How the industry continues to grow in 2022.

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