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The FTX catastrophe has been disrupting the whole cryptocurrency industry and triggered new legislative processes in many countries like Indonesia. According to many experts, it could just be the beginning.
After filing for insolvency on Friday along with the announcement of its founderâs resignation, the second largest exchangeâs users are still struggling to cope with the fact. Widely reckoned as among the influential players in the crypto sphere, many enthusiasts considered FTXâs ecosystem to be too strong to fail.Â
Like most parts of the world, Indonesia also saw a whopping cryptocurrency adoption in recent years. In the previous financial year alone, the country saw a huge increase of 1,224% in crypto transactions.
According to The Indonesian Futures Commodity Trading Supervisory Agency or âBappebti,â the stateâs investors traded about 859.4 trillion rupiahs($57.5 billion) last year than 64.9 trillion rupiahs in 2020 in cryptocurrencies. The government is considering employing strict rules to protect its residentsâ crypto investments against such a debacle and safeguard its economic sector.
In the latest news from Indonesia, the authorities are considering appointing its Financial Services Authority (OJK) as the cryptocurrency marketsâ sole regulator. Indonesia, the largest economic country in Southeast Asia, experienced a remarkable investment boom in the crypto sector in recent years. Currently, the cryptocurrency industry is being regulated concurrently by the stateâs Trade Ministry and the Commodity Futures Trading Regulatory Agency.Â
The Indonesian Finance Minister, Sri Mulyani Indrawati, said on Thursday that the proposed change is pursuant to their financial sectorâs legislation being debated in the parliament. Talking about the meteoric rise of digital currency investors to 15.1 million till June this year, where there were only 4 million Indonesians the previous year, the importance of a âstrong mechanism for supervision and investor protectionâ should not be ignored.Â
âWe need to build a mechanism of supervision and investor protection that is quite strong and reliable, especially for high-risk investment instruments,â she told a parliamentary hearing, noting that the cryptocurrency market has recently faced turbulence.
The current government submitted the bill to parliament earlier this year in September. This Thursday, a meeting took place to get the parliamentâs initial response and any additional provisions for the new legislation. Upon conclusion of the meeting, the finance minister commented that the legislation would empower the OJK to supervise and regulate the financial sectorâs technology innovation and digital assets, including cryptocurrencies.Â
Per reports, the parliament proposes the addition of its central bank, Bank Indonesia, into the bill to have economic growth and price stability. Once both the executive and legislative branches of the parliament agree to all the provisions, the said bill will become the countryâs law.
When asked about the parliamentâs proposal, Ms. Mulyani agreed with it but also pressed to recognize the importance of the financial regulatorâs independence. She said:
Featured image from Pixabay and chart from TradingView.comIt is important for us to continue to provide signals that independence and credibility of institutions ⊠are strengthened and maintained because this is the most important asset to maintain financial system stability.
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