The Financial Services Authority of Indonesia, also known as the OJK, tightened its grip on trading crypto and facilitating sales in the fifteenth largest economy in the world.
The OJK banned crypto-related activities for financial firms on Jan 25, stating in an Instagram post, “OJK has strictly prohibited financial service institutions from using, marketing, and/or facilitating crypto asset trading.”
The OJK cited high risks and volatility that are often associated with trading cryptocurrencies as primary reasons for the ruling. It also warned, “Please beware of allegations of Ponzi scheme scams in crypto investments.”
Indonesian crypto investments skyrocket
Last year, Indonesia saw a tremendous increase in cryptocurrency adoption with more than 7.2 million of its population owning at least one digital currency. In addition, the total amount of crypto transactions in 2021 reached $59.83 billion (859 trillion Indonesian rupiah), a 1,431.67% higher volume than in 2020, which saw a 60 trillion rupiah trade volume.
Currently, the OJK does not supervise the trading of digital assets or exchanging commodities in Indonesia. The whole process is supervised by the trade ministry and the Commodity Futures Trading Regulatory Agency, also known as the BABBEPTI.
The BABBEPTI has previously whitelisted a total of 229 cryptocurrencies that are allowed for trading on some of the registered crypto exchanges. The whitelisted digital assets inclue Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Tether (USDT), and Ripple (XRP).
Other nations pushing for possible bans
This is not the first time that a regulator wants to ban cryptocurrency trading due to high volatility, the risks associated with trading them, or the ability to be used for criminal activities. Recently, the Central Bank of Russia also made serious suggestions on crypto trading. Russians will still be allowed to own crypto but not use it.
The deputy chairman of Russia’s Central Bank recently said, “I think we will publish a report on cryptocurrencies in the near future. This report will contain our approaches to the place for cryptocurrency we see in the Russian financial market.”