The Indonesian Financial Services Authority (OJK) has announced that local financial institutions offering new products and services will need to participate in the regulatory sandbox or make way for testing upcoming innovations, including crypto asset products. According to a report by DetikFinance, once regulated and supervised, crypto assets will also be required to go through the regulatory sandbox in the future. This means that crypto firms in the sandbox stage will undergo evaluation by the regulator before they can operate in the country. Regulatory sandboxes are typically used by businesses to test and experiment with new products or services for a limited period. Hasan Fawzi, the head of the country’s supervision of financial sector technology innovation, digital financial assets, and crypto assets, stated that the inclusion of crypto assets in the regulatory sandbox aims to eliminate fraudulent investments.
As part of this announcement, the OJK will take over the regulation of the crypto industry starting in January 2025. Currently, the industry is under the jurisdiction of the country’s commodities agency, Bappebti. While Indonesia classifies crypto assets as commodities, there is speculation that they may be reconsidered as financial instruments once the OJK assumes governance. The crypto landscape in Indonesia has been growing, with a pro-crypto vice president elected in the recent presidential elections. During his campaign, Gibran Rakabuming Raka promised to prepare experts in blockchain, crypto, artificial intelligence (AI), and cybersecurity to support local youth in the digital space. In 2023, the country launched its national crypto exchange, the Indonesian Crypto Asset Futures Exchange, which is monitored by local regulators and serves as the sole platform for legal digital asset exchange in the country. The exchange has also started conducting blockchain trials for public services. Earlier this year, Indonesian officials were considering changes to the dual taxation on crypto, urging a reevaluation of the current 0.1% capital gains tax and 0.11% VAT on crypto transactions.