Crypto traders are deeply troubled after it emerged that Bitcoin brokers in Indonesia now require over $70 million to launch futures trading, local English-language news outlet Jakarta Post reported. There is a real fear that this will cripple the development of a young and growing market.
Following regulations which came into effect last October, trading platforms hoping to offer crypto-based instruments are able to do so, but the use of cryptocurrency continues to be banned. However, those trading platforms are required to have one trillion Indonesian rupiah (about $70 million) minimum capital. The dismay is understandable when the equivalent capital needed to begin trading traditional commodities is a mere 2.5 billion rupiah (USD $178 000).
Indonesia’s Futures Exchange Supervisory Board, Bappebti, who are controlled by the Indonesian Ministry of Commerce, announced the new regulations on the implementation of physical markets for crypto assets in futures trading. The government established the board in order to monitor the non-banking financial sector including the Forex market. Bappebti’s obligations include the issuance of licenses to individuals and companies, defining of rules and regulations, inspections, and monitoring of all activities in the futures market.
Regulation Should Not Kill An Industry
The rules focus on good governance for cryptocurrency traders, legal certainty and consumer protection. They also require the regulator to establish a physical market for futures trading in virtual currencies.
Oscar Darmawan, CEO of local cryptocurrency exchange Indodax, told Reuters that the “very large” minimum capital level is more than the requirement for opening a rural bank. Regulation is needed to support a sector, help the economy and protect people “but it should not kill an industry,” he said.
There is no data on the size of Indonesia’s crypto market, but industry insiders believe the number of investors has nearly matched that of the country’s main stock market.
Teguh Kurniawan Harmanda, Chief Operating Officer of trading firm Tokocrypto, said the capital requirement was a surprise as it did not come up in industry consultations held by Bappebti prior to the release of the regulation.