Jakarta. Indonesia is preparing to introduce a single investor identification (SID) system for digital assets, a reform that could reshape the country’s crypto market. The scheme promises stronger oversight and improved investor confidence, but it also raises questions over data security and the risks of centralisation.

The Financial Services Authority (OJK) is finalizing the framework, which will assign each crypto investor a unique identity across platforms. Hasan Fawzi, OJK’s chief executive for financial technology and crypto oversight, said the reform would tighten governance and strengthen investor confidence. “With SID, transactions will become more transparent and there will be no risk of duplicate identities,” Hasan said at the CFX Crypto Conference 2025 in Tabanan, Bali on Friday.

The regulator is still conducting a detailed review before implementation. In the preparatory phase, OJK will carry out “data cleansing” and repeat know-your-customer (KYC) checks to ensure every investor's identity is unique.

Afterward, the agency will work with industry players to design the system and appoint an operator. Options on the table include collective SID management under independent supervision, or delegation through an officially mandated crypto exchange. The change will align crypto oversight more closely with Indonesia’s capital markets, where investor IDs are already standard.

For an industry long plagued by associations with money laundering and cybercrime, such scrutiny may help repair its reputation. “With SID, oversight can be conducted across platforms. Government bodies can trace funds more easily and enforcement can move faster,” said Thimotius Martis, chief marketing officer at Pintu, a local exchange.

By June 2025, Indonesia counted 15.9 million crypto investors, up 5.2 percent on the previous month, according to OJK. Yet trading volumes slipped to Rp 32.3 trillion ($2bn) in June from Rp 49.6 trillion the month before, underscoring how activity remains volatile. Total transactions this year have reached Rp 224.1 trillion. By comparison, the country’s capital market boasted a record 17 million investor SIDs in July.

Industry players welcome the move. Indodax chief executive William Sutanto said a unified SID would bring crypto regulation closer to capital-market standards and improve investor protection. For long-term participants, that could reduce systemic risk and draw in more institutional money, helping to deepen liquidity and smooth out swings.

But centralisation carries its own hazards. Combining SID and KYC systems could create a single point of failure. “If there is a breakdown, the entire market could be affected,” warned Sutanto. A data breach could easily erode the very trust regulators hope to build.

Elsewhere, governments are pursuing similar measures. The European Union’s Markets in Crypto-Assets regulation (MiCA), due in 2025, will impose stricter customer-verification and disclosure rules. Singapore already subjects exchanges to tough licensing requirements and has banned retail leverage trading. 

Some hope the initiative will go further. Tokocrypto’s CMO, Wan Iqbal, has called for the SID system to extend beyond crypto into banking and other financial sectors. A cross-sector identity would make onboarding swifter and reduce friction across asset classes, knitting crypto more firmly into the national financial system.