Indonesian financial media outlet Kontan reports that cryptocurrency futures trading is now legal in the country. This is another surprising development from a land whose central bank banned all cryptocurrency transactions only six months ago.
Specifically, in December 2017 Agus Martowardojo, Governor of Bank Indonesia, said that payment providers would be prohibited from conducting business with parties connected with digital currency, and a law was passed rendering all transactions executed using a non-approved fiat currency illegal.
Last week, however, it was reported that Tron, a relatively new cryptocurrency which is already one of the biggest in the world, had won a listing on the country's biggest cryptocurrency exchange, Indodax. The existence of Indodax itself could be considered surprising, but the aforementioned law technically did not cover cryptocurrency trading or mining.
Cryptocurrency is very popular in Indonesia, where less than half of the population have bank accounts, and this is reflected in the performance of Indodax. It processes almost $20 million worth of cryptocurrency trading a day, and some predict that it will surpass the country’s main Stock Exchange in terms of user numbers by the end of 2018.
According to Kontan, Dharma Yoga, head of the Commodity Futures Trading Supervisory Agency (known as Bappebti), announced last week that cryptocurrency is to be considered a commodity that can be traded on futures exchanges. The decision came after a four-month review.
Futures are a kind of financial derivatives, contracts based on the sale of a commodity (gold, wool, metals for example) which are executed after a pre-agreed delay. Futures contracts based on Bitcoin were first launched on the CBOE and the CME exchanges in Chicago in December 2017. Since then, other venues have either launched similar products or expressed an interest in doing so in the future - examples include Deutsche Börse, Goldman Sachs, and Tokyo Financial Exchange
Bappebti will also establish regulations governing cryptocurrency exchanges, wallets, and mining operations, said Yoga. The agency is also preparing taxation laws, and has requested that Indodax report cryptocurrency trading information.
