Indonesia bans financial firms from facilitating crypto sales

Trade in crypto assets is surging in Indonesia, with total 2021 transactions reaching S$80.5 billion. PHOTO: REUTERS

JAKARTA (REUTERS) - Indonesia's Financial Services Authority (OJK) on Tuesday (Jan 25) warned that financial firms are not allowed to offer and facilitate sales of crypto assets amid a boom in crypto trading in South-east Asia's largest economy.

"OJK has strictly prohibited financial service institutions from using, marketing and/or facilitating crypto asset trading," the regulator said in a statement posted on Instagram.

It warned that the value of crypto assets often fluctuates and that people buying into the digital assets should fully understand the risks.

"Please beware of allegations of Ponzi scheme scams in crypto investments," it added, without elaborating.

The warning follows similar concerns by the central banks of Thailand and Singapore.

Trade in crypto assets is surging in Indonesia, with total 2021 transactions reaching 859 trillion rupiah (S$80.5 billion), up from just 60 trillion rupiah in 2020, media reported, citing Trade Ministry data.

Indonesia allows sales of crypto assets in the commodities exchange and trading is supervised by the trade ministry and the Commodity Futures Trading Regulatory Agency, not by the OJK.

The ministry is currently facilitating the set up of a separate bourse for digital assets, called the Digital Futures Exchange, which officials say will be launched in the first quarter.

However, cryptocurrencies cannot legally be used for payments in the country.

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