Jakarta. Uncertainty currently hits Indonesia’s crypto industry due to the absence of regulations on its supervising body.

Indonesia is still waiting for the government regulation on the handover of the crypto asset supervisory from the Trade Ministry’s Commodity Futures Trading Agency (Bappebti) to the Financial Services Authority (OJK). This much-awaited regulation is set to lay down the technical rules of the shift in the supervisory body. The 2023 Financial Sector Law states that the handover should take place no later than Jan. 12 next year. 

But without the aforementioned government regulation, the transition team -- comprising the OJK, Bank Indonesia, and Bappebti -- cannot be formed. This transition team is in charge of drafting the decree that will delegate the crypto supervision and regulation authority to OJK.

According to digital economy expert Nailul Huda, Indonesia should have rolled out the government decree on the transfer first before the OJK issued its own regulations. But what happened was the opposite. The OJK regulation has already been out since the weekend. Nailul said that the government’s sluggish response gave the impression that the Trade Ministry was hesitant to hand over the supervisory role to OJK. Nailul also underlined the transfer needed to be smooth as Indonesia’s crypto industry is still quite nascent.

“The transfer may mean more stringent regulations. But OJK’s experience would be a boon for investors,” Nailul said.

Ibrahim Assuaibi, the director of the futures brokerage company Laba Forexindo Berjangka, said that the government regulations would provide legal certainty for industry players. Ibrahim said that his company had been engaging in talks with the Bappebti and OJK regarding this transfer. A judicial review that demands the transfer postponement is also “very unlikely”.

“Bappebti has already issued a circular that states the role transfer is something that is legally binding,” Ibrahim said.

According to Ibrahim, the industry looks forward to the transfer, saying that it would be better for OJK to oversee crypto assets and derivatives with underlying assets. Ibrahim said the transfer would mean a more streamlined structure. People might also be able to make their transactions directly through a system supervised by OJK and Bank Indonesia, thus eventually replacing traders. Roles in the crypto and derivatives industry might also undergo some changes. He added that the OJK might also require every broker, both in the crypto and derivatives sectors, to get certified. Ibrahim said he hoped the OJK would spread the word should there be any changes to the industry players would not be surprised by the adjustments.

Crypto exchange Bittime also commented on the transition plan. The company has been engaging with the regulators and associations to prepare for the transition, according to Bittime’s chief marketing officer Immanuel Giras Pasopati. Immanuel said that the OJK had also communicated the role takeover plan well, including by issuing a regulation that lays out the details on the transition process.

“We will fully support the transition. … We have read the OJK regulation, and we are committed to participating in the various phases. … We also hope that they will continue to involve all stakeholders in every policy-making process,” Immanuel said.

Cryptocurrency investment platform Triv also does not mind the transition, according to its chief executive officer Gabriel Rey. He said that OJK had promised them that they would recognize permits issued by Bappebti. Gabriel said that OJK’s latest regulations did not show any significant changes compared to the rules set by Bappebti.

Amidst the transition, OJK said that the agency had made preparations for the role takeover, its top brass Hasan Fawzi said. Aside from preparing its employees to carry on the transition, OJK has also conducted in-depth research on the national crypto asset industry. This includes studies to compare how other countries had been supervising their crypto industries. “All in all, we have really prepared [for the transfer], including the capacity building, the necessary regulations, and the development of the supervision system,” Hasan said.

Bappebti’s head Kasan said that any rules set by Bappebti would remain in place as long as the government regulation is not out yet.