Introduction
With the rapid growth of digital financial assets such as cryptocurrencies, the Indonesian government has proactively established a comprehensive legal framework aimed at strengthening regulatory oversight, ensuring market integrity, and protecting investors. Since 2021, crypto assets were classified as a digital intangible commodity and the trading was regulated and supervised by the Commodity Futures Trading Regulatory Agency (Badan Pengawas Perdagangan Berjangka Komoditi, or "Bappebti"). However, with the enactment of the Financial Sector Development and Strengthening Law in 2023 (Law No. 4 of 2023, or "PPSK Law"), crypto assets are now recognized as digital financial assets. As of January 10, 2025, the regulation and supervision of crypto assets have been transferred to the Financial Services Authority (Otoritas Jasa Keuangan, or "OJK") with related activities categorized under Technology Innovation in the Financial Sector (Inovasi Teknologi Sektor Keuangan, or "ITSK"). The reclassification of crypto assets under financial sector regulation introduces new regulatory considerations, likely influencing market behavior and governance while shaping the roles of participants and oversight authorities.
1. Overview of Legal Framework on Crypto Assets
On January 12, 2023, the Indonesian government enacted PPSK Law, establishing a new legal framework for regulating crypto assets activities. Before the PPSK Law, Bappebti Regulation No. 8 of 2021 on the Guidelines for the Organization of Physical Market Trading of Crypto Assets Through Futures Exchange as lastly amended as amended by Bappebti Regulation No. 9 of 2024 (“Bappebti Reg. 8/2021”) classified crypto assets as digital intangible commodities1 tradable through crypto traders2 in a crypto market3 within the Futures Exchange. Now, under the new framework, crypto assets are categorized as digital financial assets and activities related to crypto assets fall under the scope of ITSK, technology innovation in the financial Sector.4 Article 1 point 34 of PPSK Law defines ITSK as technology-driven innovation that impacts products, activities, services, and business models within the digital financial ecosystem.5 Accordingly, only financial service institutions and other entities operating in the financial sector may now engage in crypto trading.6
In line with the shift, the regulation and supervision of crypto assets has fully been transferred from Bappebti to OJK as of January 10, 2025.7 As a result, crypto assets’ trading, and transaction settlements are subject to OJK regulations, with supporting infrastructures that must meet OJK standards,8 specifically those regulated under the following two key regulations: (i) OJK Regulation No. 27 of 2024 on the Implementation of Trading in Digital Financial Assets including Crypto Assets ("POJK 27/2024"), and (ii) OJK Circular Letter No. 20/SEOJK.07/2024 on the Implementation of Digital Financial Assets including Crypto Assets ("SEOJK 20/2024"). These regulations provide clearer compliance guidelines for crypto assets related activities, enhancing oversight and risk management within the growing digital financial sector.
2. Crypto Trading under the OJK
2.1 Definitions
Crypto assets are classified under “Digital Financial Assets” which is defined under POJK 27/2024 as financial assets stored or represented digitally (“Digital Financial Assets”).9 POJK 27/2024 further defines “Crypto Assets” as a digital representation of value that can be stored and transferred using distributed ledger technology, such as blockchain, to verify transactions and ensure data security. Unlike central bank-backed currencies, crypto assets are issued by private entities, can be traded, stored, and transferred electronically, and may take the form of digital coins, tokens, or representations of other assets, including both backed and unbacked crypto assets (“Crypto Assets”).10
2.2 Parties Involved in Digital Financial Assets Trading
Trading of Digital Financial Assets involves the following parties (“Trading Organizers”):11
| a. | Digital Financial Asset Exchange Provider ("Exchange") – A limited liability company that provides the system and/or facilities to facilitate activities related to Digital Financial Asset trading and/or provides trading reports.12 |
| b. | Clearing House for Guarantee and Settlement ("Clearing House") – A limited liability company that offers transaction settlement services for Digital Financial Asset trading and guarantees transaction settlements.13 |
| c. | Custodian/Repository Manager ("Custodian") – A limited liability company responsible for safekeeping, maintenance, supervision, and/or delivery of Digital Financial Assets.14 |
| d. | Traders ("Traders") – A limited liability company that engages in Digital Financial Asset trading, either on its own behalf and/or by facilitating consumers.15 |
| e. | Other parties as designated by the OJK. |
Trading Organizers can operate only after obtaining a business license from the OJK.16 However, Article 134 of POJK 27/2024 includes a grandfather clause allowing those previously licensed by Bappebti to continue operations under their existing license. Additionally, controlling shareholders, as well as members of the board of directors and board of commissioners of an Exchange, Clearing House, Custodian, or Trader, must undergo a fit and proper test and secure OJK approval before assuming their roles (pihak utama).17 Beyond licensing requirements, Trading Organizers must also adhere to the five good governance principles, including (i) shareholder commitment, (ii) fulfillment of duties and responsibilities by the board of directors and board of commissioners, (iii) internal control mechanisms, (iv) avoidance of conflicts of interest, and (v) the development and execution of a business plan.18
2.3 Criteria of Digital Financial Assets Traded in the Market
Digital Financial Assets are tradable if they fulfils the following criteria:19
| a. | issued, stored, transferred and/or traded by using distributed ledger technology;20 |
| b. | not a financial asset that is electronically recorded by financial services institutions; |
| c. | not originating and/or used in any activity that is unlawful; and |
| d. | other criteria that may be determined by the OJK. |
While Crypto Assets fall under the broader category of Digital Financial Assets, they are subject to additional conditions to ensure security, transparency, and legitimacy. Crypto Assets must meet the following criteria in order to be tradable: 21
| a. | as a primary digital representation of value; |
| b. | using distributed ledger technology that is accessible by the public; |
| c. | having utility and/or being backed by assets; |
| d. | traceable or not having any features that obscure or hide ownership and transaction data; and |
| e. | having undergone assessment using the methods set out in the regulations and rules of the Exchange. |
Based on Article 9 of POJK 27/2024, the Exchange will issue a list of Crypto Assets containing the Crypto Assets to be traded in the Digital Financial Assets market (“Crypto Assets List”).22 Pursuant to Article 132 of POJK 27/2024, the Exchange must finalize this list within three months of the regulation’s effective date, setting the deadline on April 10, 2025. Until then, the Crypto Assets List previously determined by Bappebti remained in effect.23 However, at the time of writing, there has not been any new Crypto Assets List issued by the Exchange. Trading Organizers are prohibited from trading any Crypto Assets that are not included in the Crypto Assets List.24 However, traders may submit proposals to the Exchange for the addition or removal of specific Crypto Assets.25 The Exchange is required to conduct a review of the Crypto Assets List at least once every three months or as needed.26
In addition to the Exchange’s oversight, the OJK holds the authority to evaluate Crypto Assets included in the Crypto Assets List.27 Based on its assessment, the OJK may prohibit the trading of certain Crypto Assets and instruct the Exchange to remove them from the Crypto Assets List.28 Any such decisions will be publicly available on official OJK channels, such as its website.
2.4 Consumers in Digital Financial Assets Trading
Traders can provide services to both individual consumers (Indonesian and foreign nationals) and non-individual entities (business or legal entities) that meet the requirements under POJK 27/2024.29 As part of the consumer onboarding process, Traders must conduct KYC process to ensure the accuracy and completeness of consumer data, as well as assess their background and profile.30 To facilitate this process, Traders must also be integrated with the citizen administrative database managed by the relevant ministry overseeing domestic affairs.31 Additionally, Traders are required to implement anti-money laundering (“AML”), counter-terrorism financing (“CTF”), and measures to prevent the proliferation of weapons of mass destruction (“WMD”) for all consumers.32
Before engaging in Digital Financial Assets trading, consumers must first deposit:33
| a. | funds for transactions, which must be placed into a separate account registered under the Trader’s name for the benefit of the Clearing House; and/or |
| b. | Digital Financial Assets, which must be stored in the Trader’s designated wallet. |
Traders are also required to carry out customer due diligence on all wallets owned by both consumers and non-consumers before accepting Digital Financial Asset deposits. This ensures that wallet identities are properly verified and that they are not linked to illicit activities, such as money laundering, terrorism financing and proliferation of WMD crimes.34 Furthermore, Traders are prohibited from facilitating Digital Financial Assets transactions if the consumers do not have sufficient funds and/or Digital Financial Assets balance.35 As an additional safeguard, Clearing House must conduct verification on every transaction facilitated by Traders, reinforcing oversight and ensuring compliance with regulatory standards.36
2.5 Reporting Obligations
Trading Organizers are required to submit to the OJK, (i) the periodic reports consisting of daily, monthly, quarterly, and annual reports, and (ii) incidental reports, including but not limited to report on the change of name, address, and ownership composition.37 In addition, Trading Organizers must submit to the head of Financial Transaction and Analysis Reporting Center (Pusat Pelaporan dan Analisis Transaksi Keuangan or “PPATK”) reports of suspicious transactions and other reports as required under the relevant laws and regulations on AML, CTF, and prevention of proliferation of WMD.38
2.6 Administrative Sanctions
POJK 27/2024 also outlines administrative sanctions that may be imposed for the violations of its provisions. For instance, in the event of failure to submit the reports, administrative sanctions that can be imposed are written reprimand, termination of part or all of business activity, administrative fines, inclusion of the responsible party on the list of disreputable individuals in the financial sectors; and/or revocation of business license.39
Conclusion
Indonesia’s regulatory transition of Crypto Assets from Bappebti to OJK under the PPSK Law and its relevant implementing regulation mark a significant shift, integrating Crypto Assets trading into the broader financial sector through reclassification. With stricter compliance, licensing, and governance requirements, the new framework enhances market oversight, investor protection, and instigating market growth. Simultaneously, the introduction of a Crypto Assets List and OJK’s authority to regulate its composition reinforce transparency and risk management, while stringent AML and transaction verification measures further secure trading activities.
These reforms aim to foster a more structured and reliable Digital Financial Assets market, but businesses must remain proactive in adapting to evolving regulations. As the Indonesian government refines its approach, the successful implementation of these policies will be crucial for strengthening market integrity and positioning the country competitively in the global crypto market.
2 Under Bappebti Reg. 8/2021, “Physical Crypto Asset Traders” are those who have obtained approval from the Head of Bappebti to engage in crypto asset transactions, either on their own behalf or to facilitate transactions for customers (Article 1, point 8).
3 The term “Physical Market for Crypto Assets on the Futures Exchange” refers to a physical market for crypto assets, organized electronically by crypto traders for buying and selling transactions. The market is supervised by the Futures Exchange (Article 1, point 6).
4 Article 213 (h) of PPSK Law.
5 Article 1 (34) of PPSK Law.
6 Article 215 (1) of PPSK Law.
7 Article 3 of Government Regulation No. 49 of 2024 on Transfer of Regulatory and Supervisory Duties for Digital Financial Services including Crypto Assets and Financial Derivatives (“GR 49/2024”).
8 Article 4 (1) and (2) of GR 49/2024.
9 Article 1 (5) of POJK 27/2024.
10 Article 1 (6) of POJK 27/2024.
11 Article 2 (1) of POJK 27/2024.
12 Article 1 (7) of POJK 27/2024 and Article 18 (1) of POJK 27/2024.
13 Article 1 (10) of POJK 27/2024 and Article 27 of POJK 27/2024.
14 Article 1 (11) of POJK 27/2024 and Article 35 of POJK 27/2024.
15 Article 1 (12) of POJK 27/2024 and Article 44 of POJK 27/2024.
16 Article 55 of POJK 27/2024.
17 Article 60 (1) (2) and (3) of POJK 27/2024.
18 Article 62 (3) of POJK 27/2024.
19 Article 4 (1) of POJK 27/2024.
20 Distributed ledger technology (DLT) is the technological infrastructure and protocols that allow simultaneous access, validation, and record updating across a networked database. DLTs allow information to be stored securely and accurately using cryptography. The data can be accessed using "keys" and cryptographic signatures. Once the information is stored, it can become an immutable database. The rules of the network, written into the coding of the database programming, govern the ledger. One of the examples of DLT is blockchain that serves as means of payment for cryptocurrencies, allowing for digital transactions without the need for a centralized authority.
21 Article 8 (1) of POJK 27/2024.
22 Article 9 (1) of POJK 27/2024.
23 Article 137 (a) of POJK 27/2024.
24 Article 9 (2) of POJK 27/2024.
25 Article 11 (1) of POJK 27/2024.
26 Article 13 (1) of POJK 27/2024.
27 Article 14 (1) of POJK 27/2024.
28 Article 14 (3) of POJK 27/2024.
29 Article 80 (5) of POJK 27/2024.
30 Article 81 (1) of POJK 27/2024.
31 Article 81 (5) of POJK 27/2024.
32 Article 81 (7) of POJK 27/2024.
33 Article 85 (1) of POJK 27/2024.
34 Article 90 (3) of POJK 27/2024.
35 Article 93 (1) of POJK 27/2024.
36 Article 93 (2) of POJK 27/2024.
37 Article 108 (1) and Article 110 (1) of POJK 27/2204.
38 Article 112 (1) (2) of POJK 27/2204.
39 Article 113 (1) of POJK 27/2024.
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