Indonesia aims to launch its much-anticipated state-backed crypto exchange by mid-2023, according to the country’s Commodity Futures Trading Regulatory Agency (Bapebti), which currently oversees digital assets.
In a recent interview, Didid Noordyatmoko, the head of Bappebti, said that the new exchange will be set up by mid-2023, according to Bloomberg. informed of, He added that the exchange would be run by a private sector company instead of the government.
plan to Set up a state-backed crypto exchange This comes as the nascent digital asset industry is rife with scams and fraud. As mentioned, the crypto industry almost lost $4 billion The value of digital assets to hack, fraud, scam and rig pull in 2022, with the five major exploits alone totaling $2,361,000,000.
Furthermore, several high-profile crypto companies filed for bankruptcy last year, leaving retail customers with billions in losses. ftx and Singapore-based Zipmex are among the more notable crypto exchanges that failed last year.
The blueprint of the new state-backed exchange is similar to stock exchanges, separating trading, clearing and custody under official oversight. Private sector crypto platforms will execute trades once the exchange is set up.
“The difficult part is that we cannot find a benchmark for this kind of crypto exchange,” Noordiatomko said. “It could be a first.” He added that other state-backed bodies will handle clearing and custody to protect clients’ assets and avoid any repetition of the alleged fraud like FTX.
Last September, FTX, even before the chaotic collapse of the Indonesian government City: The amendment to tighten regulations on crypto exchanges in the country, adding that at least two-thirds of the exchanges’ management “must be Indonesians resident in the country.”
Indonesian officials outlined several other amendments. For example, the government mandated that local crypto exchanges need to store client funds in third-party bank accounts. Furthermore, the government has prohibited exchanges from reinvesting crypto assets.
It is worth noting that interest in crypto is growing rapidly in Indonesia. According to Bappebati, crypto asset transactions reached 859.4 trillion rupees in 2021 (worth about $57.7 billion), up 1,224% from 64.9 trillion in 2020.
The country ranks 20th out of 146 economies in the 2022 Global Crypto Adoption Index from Chainalysis, a blockchain analysis firm headquartered in New York City.
However, the country’s crypto sector has been badly affected after the recent unfortunate events. Data from CryptoCompare shows that monthly trading volume fell 95% to $233 million last month from a peak of $4.7 billion in May 2021.
Meanwhile, experts believe that crypto adoption in Indonesia will get another boost with the upcoming crypto stock exchange. “As the industry grows, we will start to see more local projects,” Peng Xue Kai, CEO of major Indonesian crypto platform Tokocrypto, previously said.
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