The government of Indonesia wants to assign crypto supervision to the Asian nation’s financial watchdog in order to ensure better protection for investors. The move is part of a planned overhaul of regulations in the sector aimed at increasing oversight of the expanding digital assets market.
Indonesia Mulls Over New Financial Legislation Designed to Tighten Crypto Rules
Indonesian authorities intend to task the Financial Services Authority (OJK) with regulation, supervision and oversight of cryptocurrency investments, which have been booming in the country. The market is currently overseen by the Ministry of Trade and the Commodity Futures Trading Regulatory Agency which share responsibilities.
The change, proposed by Finance Minister Sri Mulyani Indrawati, is part of new legislation for the financial sector that is now being debated in parliament, Reuters reported. Lawmakers presented the draft law to the government in September when news came out that Southeast Asia’s largest economy is preparing to tighten regulation of crypto exchanges.
While crypto payments are illegal in Indonesia, investments are allowed in the commodities market. According to Sri Mulyani, there were over 15 million crypto investors in the country as of June, compared to just 4 million only two years ago. The number of investors in the stock market was 9.1 million in 2020. At a parliamentary hearing on Thursday, she stated:
We need to build a mechanism of supervision and investor protection that is quite strong and reliable, especially for investment instruments that are high risk.
During the meeting, which was held to allow the executive power to present its initial response and suggest additions to the legislative proposal, the minister also noted that the cryptocurrency market has faced turbulence recently. The bill will be passed into law after both the government and the legislature agree on all of its provisions.
The Indonesian parliament also wants to widen Bank of Indonesia’s responsibilities to look after not only price stability but also economic growth. Sri Mulyani expressed her support for the proposal but also emphasized the importance of maintaining the independence of financial regulators, the central bank in particular.