Cryptocurrency Regulations in Indonesia

The cryptocurrency sector in Indonesia has undergone significant development and transformation, which has evolved from an undeveloped regulated market into a strict legal framework that is governed by multiple regulatory authorities. Southeast Asiaʼs largest economy, Indonesia, the country is now providing clear guidelines for digital asset operations while safeguarding its financial stability and monetary sovereignty.

What Is the Legal Status of Cryptocurrency in Indonesia

Today, cryptocurrency is legally recognized in Indonesia, but it should operate within defined regulatory obligations and boundaries. The country views digital assets as commodities, which allows their use for investment and trading purposes, but not as a form of payment.

Current Legal Framework

Aforementioned, cryptocurrency in Indonesia is legally classified as a “tradable commodityˮ, not a currency. Although ownership and trading are permitted, utilizing it as payment is strictly not legally allowed

Permitted Activities:

• Cryptocurrency trading on Bappebti-licensed exchanges 
• Individual and institutional ownership of significant assets
• Investment and speculative trading while still under regulatory supervision 
• Cross-border remittances through applicable and approved platforms

Prohibited Activities:

• Use of cryptocurrency for payments and commercial transactions 
• Operating unlicensed crypto or payment gateways
• Accepting cryptocurrency as a form of settlement for goods and services is not allowed.

 Payment System Restrictions

Bank Indonesia enforces a strong prohibition on the usage of cryptocurrencies as a payment method under Regulations No. 20/6/PBI/2018 and the 2023 Payment Systems Law. This regulatory legislation helps the Indonesian Rupiah act as a legal tender, which reinforces the central bankʼs authority.

Merchants and service providers that allow cryptocurrency as payments tisks which cafe regulatory action, which includes administrative fines, license revocation, and even operational suspension. These restrictions are meant to prevent possible threats and risks to the financial system and secure the effectiveness of the national payments infrastructure.

Regulatory Authority Structure

The countryʼs cryptocurrency system is governed and overseen by multiple regulatory agencies. Each of these regulatory bodies oversees specific responsibilities for distinct aspects of financial asset oversight. This collaborative structure ensures broad and effective regulation across trading, monetary control, financial integrity, as well as consumer protection.

Bappebti, the Lead Regulatory Cryptocurrency Trading

The commodity duties trading regulatory agency, known as Bappebti, is also governed under the Ministry of Trade. Bappebti is considered as lead primary authority who is responsible for overseeing cryptocurrency exchanges and virtual asset trading platforms. Their key responsibilities are:

• Supervision of Virtual Asset Service Providers (VASPs) when licensing.
• Setting operational security and risk management standards for these exchanges.
• Monitoring behavior and transaction patterns in order to detect any suspicious actions.
• Enforce consumer protection regulations as well as fraud prevention measures.
• They also establish routine audits and assessments of compliance of licensed entities.

 As of 2025, Bappebti has authorized over 20 licensed exchanges, which include platforms such as Indodax, Tokocrypto, Pintu, and Reku. These platforms are required to maintain compliance with regulatory obligations, including technical, operational, and financial benchmarks, and are subject to ongoing supervision as well as regular reviews of the operations.

Bank Indonesia: Payment System Oversight

Bank Indonesia has a primary authority over Indonesiaʼs payment systems and the implementation of national monetary policy. The central bank sustains a strict restriction on the use of cryptocurrency for payment purposes, which reinforces the use of the Indonesian Rupiah as legal tender.

Bank Indonesiaʼs obligatory regulations include:

• Securing the effectiveness of monetary policies 
• Present financial system instability
• Ensure consumer protection standards
• Sustain the integrity of the national payment system

PPATK: Anti-Money Laundering Enforcement

The Indonesian Financial Transaction Reports and Analysis Center (PPATK) enforces anti-money laundering and counterterrorist financing measures. Their responsibilities are:

• Monitor the submission of Suspicious Transaction Reports (STRs) 
• Employ financial intelligence gathering and analysis
• Collaborate with international Financial Intelligence Units (FIUs) 
• Support the investigation and prosecution of financial crimes

Otoritas Jasa Keuangan (OJK): Traditional Financial Institution Oversight

The Financial Services Authority, which is the OJK currently, does not regulate cryptocurrency or VASPs directly. However, it remains the supervisory authority over traditional financial institutions that could interact or provide services to crypto-related businesses. Their overview includes:

• Monitor indirect exposure to cryptocurrency market risks
• Evaluate institutional risk management activities
• Ensure that high standards are maintained in financial institutions that engage with virtual asset platforms

Compliance Requirements for VASPs

VASPs that operate within Indonesia are more likely to be subject to rigorous compliance obligations, which are established to ensure secure and transparent operations in the digital asset market.

Licensing and Registration

All VASPs are required to secure licenses from Bappebti before starting any operations. The process is meticulously structured in order to verify the providerʼs technical and operational readiness. The key requirements include:

• Demonstrate strict and strong technical capabilities 
• Submission of standards operating procedures
• Employing mechanisms that involve customer protections as well as security controls
• Maintain minimum capital requirements

After being licensed, exchanges are required to have regular reviews and audits to observe adherence to regulatory standards.

Customer Due Diligence (CDD) Requirements

Licensed VASPs are required to implement strong Know Your Customer (KYC) and CDD protocols as a part of their onboarding and ongoing process.

Identity Verification:

• Collect and validate government-issued IDs
• Verify the address of residence and contact details 
• Identification of customer risk profiles
• Apply Enhanced Due Diligence for individuals who are categorized as high-risk profile

Transaction Monitoring:

• Real-time monitoring of transactions
• Detections and prevention os suspicious transaction patterns 
• Internal investigation of suspicious customer behavior
• Keeping detailed audit and transaction records

Record Keeping:

• Storing all customer and transaction data for a minimum of 5 years 
• Document compliance process as well as staff training
• Consistent updates of customer records and internal systems

Anti-Money Laundering Obligations

VASPs are required to establish and maintain a proper AML program that aligns with local regulations and international standards, specifically the recommendations implemented by the FATF

Suspicious Transaction Reporting:

• Filing of Suspicious Transaction Reports (STRs) with PPATK
• Submission of Threshold Transaction Reports (TTRs), especially for a high number of transactions
• Regular communication with national and international FIUs 
• Cooperation in regulatory investigations

Sanctions Screening:

• Consistency screening against UN and ASEAN sanctions lists 
• Compliance with OFAC and other AML regulations
• Utilize automated watchlist monitoring tools
• Regular updates to internal sanctions information

Risk Assessment:

• Employ a formal risk assessment framework
• Regular reviews of customers, products, and geographic risk factors
• Regulate internal control based on risk profiles
• Document of risk prevention actions and actions of compliance actions.

Taxation Framework

As of May 2022, Indonesia has been employing a strict taxation system. A system for cryptocurrency transactions that includes clear obligations on both traders and service providers. Overall, this framework involves capital gains and transaction-based transactions, with measurements utilized in order to ensure effective collection and regulatory compliance.

Tax Rates and Structure

Capital Gains Tax:

• A 0.11% final tax income is put on capital gains from cryptocurrency transactions.
• The tax is then automatically deducted by licensed exchange platforms on behalf of the Directorate General of Taxes.

Value-Added Tax:

• 0.22% VAT is extracted for each cryptocurrency transaction, applying to both buy and sell operations.
• VAT collection is automated through registered exchanges, which makes compliance smoother for users.

Tax Collection Mechanism

Licensed cryptocurrency exchanges in Indonesia are established as official tax collection agents. These platforms are responsible for withholding relevant tax from user transactions. This automatic system makes compliance doable for individual investors and regulatory oversight stronger.

Evolving Tax Clarity

While the main framework is utilized, several areas of cryptocurrency activity still remain under review and need further regulatory clarification. which include,

• Tax treatment of staking rewards and other types of passive income 
• Obligations that relate to airdrops and promotional token distributions
• NFT-related transactions, which include sales and secondary trading

Popular Cryptocurrencies and Market Trends

The country's cryptocurrency market is considered an asset diversity and has different usage patterns. Investors and consumers utilize digital assets for speculation as well as for financial applications.

Market-Leading Cryptocurrencies

• Bitcoin (BTC): Known as a store of value and used commonly for long-term investments.
• Tether (USDT): The leading stablecoin for P2P trading and remittances.
• Ethereum (ETH): Liked for its token in decentralized finance (DeFi), NFTs, and staking protocols.
• Solana (SOL): Favored among developers and users who are involved in NFT and DeFi applications.
• Avalanche (AVAX): Popular in the country because of its association with founder Emin Gün Sirer, an academic of Indonesian descent.

Market Usage Patterns

The countryʼs cryptocurrency users are rooted in economic and technological motivations such as:

• Speculative Trading: Engaging in high amounts and short-term trading strategies
• Inflation Hedging: Seeking an alternative to traditional currency over concerns about rupiah depreciation
• Cross-Border Transfers: Utilizing crypto for faster, lower-cost remittances
• Technology Adoption: Embrace blockchain-based platforms and digital finance innovations.

Recent Enforcement Actions and Market Developments

Recent enforcement actions highlight the countryʼs government and its commitment to fostering transparency, investor protection, and prevention of illicit action in the digital asset space. Regulatory prevention underscores a developing market through ongoing oversight by regulatory authorities.

Notable Enforcement Cases

2022 Binomo & Quotex Investigation:

These unlicensed platforms operated a Ponzi-style scheme disguised as crypto options trading. Their shutdown showcases the need for strong and consistent regulatory compliance.

2023 Social Media Token Fraud:

Telegram groups and influencers were investigated for promoting fraudulent tokens and schemes, which highlights the risks of unregulated promotions as well as the importance of having investor awareness.

2024 Bappebti Exchange Audits:

4 licensed exchanges were suspended after failing AML audits, which underscore the regulatorʼs strong protocols on compliance enforcement.

Compliance Technology Solutions

Meeting regulatory standards and expectations requires strict and strong compliance tools that enhance operational efficiency without compromising their accuracy.

Core Capabilities:

• Real-time monitoring: Regular examination of transactions as well as their behaviors helps detect suspicious activity with a small false positive rate.
• Customer risk assessment: Risk-based assessment based on user factors such as geography, history, and their behavior in order to guide due diligence and ongoing review.
• Automated regulator reporting: Submit required reports to PPATK and other regulatory authorities
• System integration: Flexible APIs that connect with onboarding, trading, and operational platforms in order to support end-to-end compliance.

How Can Sanction Scanner Help?

At Sanction Scanner, we empower businesses to meet AML and CFT obligations by providing advanced tools. Our tools help with real-time data and intelligent algorithms, which allow for:

• Screening against global sanctions, PEPs, and negative media exposure. 
• Ongoing monitoring for possible high-risk profiles.
• Reduce exposure to money laundering and terrorism financing.

By working with us, our tools help organizations establish secure, compliant, and resilient crypto operations.