Indonesia will modify its governmental cryptocurrency regulations and strengthen local control.

According to a deputy minister, the commerce ministry of the South Asian nation plans to develop proposed rules for crypto exchange that will necessitate that two-thirds of the governing board and commissioners to be Indonesian nationals and reside in Indonesia.

Due to financial constraints, cryptocurrency exchange Zipmex, which currently forbids users from withdrawing cash, had to make this modification.

After a parliamentary hearing, Jerry Sambuaga, the deputy minister of trade, addressed reporters:

“We don't want to give permits (to exchanges) carelessly, so only for those that meet the requirements and are credible.”

Sambuaga emphasized that the new legislation would be announced shortly by the ministry's Commodity Futures Trading Regulatory Agency (Bappebti).

A timetable, however, has not been given.

The new legislation will also oblige exchanges to employ a third party to keep customer cash and forbid exchanges from investing that money held crypto assets, according to a document released by the government.

Sambuaga remarked that he anticipated to hear about the development of an Indonesian cryptocurrency asset exchange this year. Over the last year, there has already been a delay.

Deal Street Asia said the government is striving to safeguard its people with the projected exchange for virtual currencies as interest of the people in cryptocurrencies has surged.

The inauguration of the cryptocurrency exchange was tentatively slated for 2021, but it was subsequently moved to the first quarter of 2022. Since the authorities had to discard the current strategy due to the complex nature, this postponement did not also influence the introduction of the exchange.

According to Bappebti's data, the world's biggest economy in Southeast Asia has already become progressively accommodating of cryptocurrencies, with the cumulative amount spent on transactions utilizing crypto assets expanding by more than 1,000% to 859.4 trillion rupiahs ($57.37 billion) in 2021.

The government has achieved better results in terms of transaction taxes.

According to Yon Arsal, the country's special assistant for taxation, Indonesia has gathered close to $6.8 million since enactment of fintech and cryptocurrency trade taxes in May.

On May 1 of this year, the Indonesian finance minister Nirmala Sitharaman applied a 0.1% value-added tax (VAT) to acquisitions of crypto assets.

The increasing popularity of cryptocurrencies among local investors led the Indonesian government to tax cryptocurrency transactions.

Furthermore, since the COVID-19 problem began, interest in cryptocurrencies has surged in Indonesia. In 2021, there will been 11 million crypto owners.

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