To reshape the landscape of the cryptocurrency industry in Indonesia, the Financial Services Authority (OJK) has announced that crypto firms will be subject to evaluation in a regulatory sandbox before they can obtain licenses to operate. This development comes as part of the transition of regulatory oversight from the commodities and futures trading regulator, Bappebti, to OJK, scheduled to take place in January 2025.
New Measure to Enhance Crypto Sector Security
Under the new regulatory framework, firms offering crypto services in Indonesia will be required to undergo evaluation within the regulatory sandbox. Failure to comply with this prerequisite will result in such firms being deemed to operate illegally within the country.
A regulatory sandbox functions as a controlled environment where innovative financial products and services can be tested to ensure their safety and reliability. It provides a platform for trial runs, allowing regulators to assess the potential risks and benefits associated with new offerings, thereby enhancing security and responsible management within the financial sector.
Indonesian regulator @ojkindonesia says crypto products will have to be evaluated in a sandbox environment before being licensed once it takes over supervision in January 2025, @Shoennax reports.https://t.co/jGCLiLGAYT
— CoinDesk (@CoinDesk) March 28, 2024
Crypto Assets Set to Move from Commodities to Financial Instruments
The impending shift of regulatory supervision from Bappebti to OJK marks a significant transition for the crypto industry in Indonesia. Currently classified as commodities, crypto assets fall under the purview of Bappebti. However, with OJK taking over supervision, it is anticipated that crypto assets will be reclassified as financial instruments.
Indonesia's Financial Services Authority to Regulate Crypto Industry in 2025 with Evaluation in Regulatory SandboxIndonesia's Financial Services Authority (OJK) will take over regulation of the crypto industry from the commodities agency Bappebti. Crypto firms must undergo…
— DexBot (@dexbot) March 28, 2024
"This aligns with our spirit at OJK, particularly in consumer protection and education," Hasan Fawzi, the regulator's Head of Supervision for financial technology, digital financial assets and crypto, said at a media briefing. "We expect our regulatory mechanisms to directly impact the prevention of fraudulent investments."
This article was written by Tareq Sikder at www.financemagnates.com.
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