Cryptocurrencies in Indonesia
Ripe Opportunities in Tech
Indonesia, officially the Republic of Indonesia, is a sovereign state in Southeast Asia, located between the Indian and Pacific oceans, and home to a population of over 261 million people. At more than 1,904,569 square kilometers, it’s the world’s fourth largest country, but the largest island country. This means the sea separates land more than 13,000 times. It has the largest economy in Southeast Asia and is one of the world’s fastest emerging markets.
In 2017, Indonesia’s startup community attracted at least $3 billion in venture capital towards growth among tech companies. Of that, $35 million went to Pundi X, one of the most well-funded tech companies in Southeast Asia that includes spinoffs. One was the Pundi X Pass Card, and the other a blockchain-based point-of-sale device called Pundi X POS. It sells or accepts payment in Bitcoin, Ethereum, and NPXS. Transactions are through fiat, a mobile wallet, or the Pundi X Pass card. Capital is essential as blockchain startups are increasingly prevalent. Innovative developments could further bolster Indonesia’s position as a rising regional tech hub. While the blockchain craze is still in its early stages, opportunities are ripe, though significant challenges remain. In the meantime, Pundi X is supporting donation efforts towards the victims of the Tsunami that hit Sulawesi Island at the end of September.
First, news of regulations aimed at legalizing the crypto sector came just months after the central bank of Indonesia issued a stark warning against “any use of virtual currency.” Then, after a study concluding that digital coins deserved commodity status, followed by an announcement that the country’s futures market regulator was expected to prepare broader regulations related to the crypto sector regarding trading and taxation, authorities in Bali pivoted. The crackdown came after the Bank of Indonesia declared Bitcoin an illegal form of payment. Today, Indonesia prohibits virtual currencies, and residents and tourists alike are to use only Rupiahs for all payments and transactions.
Over the past few weeks, concerns have also surfaced over the weakening of Indonesia’s currency, the rupiah, with its value approaching the lowest point seen since the Asian Financial Crisis of 1998. Given its status as the biggest economy in the ASEAN, Indonesia is always a major concern in this respect. Its previous record in contributing to the type of contagion brought the region to its knees over two decades ago. However, analysts, government officials and Bank Indonesia (BI) aren’t hitting the alarm bells just yet. The future of crypto in Indonesia remains elusive.