Introduction

Indonesia is undergoing a pivotal transformation in the regulation of crypto-assets. With the enactment of Law No 4 of 2023 regarding the Development and Strengthening of the Financial Sector dated 12 January 2023 (the “PPSK Law”) and its implementing regulations, as of January 2025, the supervisory authority over crypto-assets has officially moved from the Commodity Futures Trading Regulatory Agency (Badan Pengawas Perdagangan Berjangka Komoditi or “Bappebti”) to the Financial Services Authority (Otoritas Jasa Keuangan or OJK).

This regulatory shift reflects the government’s intention to more closely integrate crypto-assets into the financial system while enhancing consumer protection, market integrity and systemic stability in the digital assets space. Despite the transition to OJK oversight, crypto-assets remain classified as commodities or digital assets rather than financial instruments – a distinction that has important implications for their regulatory treatment, including how they are taxed.

As the OJK assumes its new role overseeing crypto-assets, significant questions arise around how the regulatory transition will be implemented and whether the OJK is prepared to accommodate both domestic and foreign investors amid growing interest in Indonesia’s digital asset market. The practical application of OJK Regulation No 27 of 2024 regarding the Implementation of Digital Financial Asset Trading, dated 10 December 2024 (“OJK Reg 27/2024”) is also yet to be tested, particularly in relation to how the authorities will approach licensing, compliance and new business innovations in the digital asset industry, be it in the form of new services or products.

At the same time, the market itself is evolving rapidly, marked by the entry of major foreign players, increasing interest in Indonesia’s digital asset sector, the emergence of blockchain-based services supporting crypto-asset businesses and advances in decentralised finance (DeFi) and blockchain-driven financial products. These developments signal a more complex and dynamic regulatory landscape ahead.

This article takes a closer look at recent regulatory developments under the OJK’s new mandate, unpacks the implications of this institutional shift and explores key trends shaping the crypto and blockchain space in Indonesia today.

Regulatory Regime Under the OJK

While regulatory oversight of crypto-assets in Indonesia has officially shifted from Bappebti to the OJK, the core regulatory framework remains largely consistent with that established under Bappebti’s authority. This continuity helps maintain regulatory stability during the transition and reflects the fact that Bappebti’s framework offered a reasonably balanced approach, providing sufficient safeguards for Indonesian consumers while remaining accessible to new and emerging foreign market participants.

Nonetheless, the OJK has introduced several key regulatory requirements aimed at strengthening protections for crypto-asset consumers. In particular, the new regime places greater emphasis on consumer protection and personal data protection, areas that were not regulated under Bappebti’s authority. These additional obligations will be discussed in detail in the sections that follow.

Foreign ownership limitations and capital requirements

To encourage foreign participation in Indonesia’s growing digital asset market, current regulations expressly permit 100% foreign ownership in companies classified as crypto-asset trader companies, commonly known in Indonesia as digital asset traders.

This provision is intended to facilitate direct investment and the establishment of a legal presence by foreign investors in Indonesia. However, to maintain market integrity and avoid potential conflicts of interest, the regulation restricts each foreign investor, whether an individual or a legal entity, to investing in only one digital asset trader operating in Indonesia.

As part of its broader objective to strengthen legal protections and boost consumer confidence in Indonesia’s crypto-asset sector, the OJK’s regime introduces a significant new requirement: the capital used to establish or fund a digital asset trader cannot come from loans or other forms of debt financing. This is to ensure that licensed entities are financially sound from the outset and capable of fulfilling their obligations to consumers.

Permitted business activities and types of crypto-assets

The current regulatory framework defines the scope of business activities that digital asset traders are authorised to conduct. These activities primarily cover trading, clearing, settlement and custody services related to crypto-assets in accordance with the regulatory framework.

While these core activities are clearly regulated, the framework also provides a mechanism for digital asset traders to apply for OJK approval to engage in additional activities beyond the current regulated scope. This mechanism reflects the regulator’s intent to encourage innovation and growth in the crypto industry, while ensuring that any expansion of business activities is subject to prior regulatory review.

In line with this regulatory flexibility, market participants have begun introducing innovative crypto business models subject to the OJK’s prior approval. These models include globally recognised practices such as self-custody wallets, which allow users to retain direct control over their digital assets; leveraged tokens, providing investors with exposure to amplified price movements; and staking activities, where participants can earn rewards by locking assets to support network operations. This measured approach enables the industry to grow and evolve in line with global trends, while keeping consumer protection and market integrity at the core of regulatory oversight. In some cases, the OJK requires these models to participate in a regulatory sandbox before granting approval to offer their services in Indonesia, allowing the OJK to assess the feasibility of the model’s implementation.

Consumer protection and personal data protection

In a market characterised by rapid growth and evolving risks, the OJK has taken a firm step towards strengthening consumer protection. Digital asset traders, along with other key participants in the crypto-asset ecosystem – including the digital financial asset repository manager, digital financial asset clearing house and digital financial asset bourse – are now required to safeguard the integrity and availability of the personal, transaction and financial data under their management.

To promote transparency and accountability, digital asset traders must also provide consumers with clear, accurate and comprehensive information on the crypto-assets they offer. In parallel, the regulation encourages education and literacy initiatives to help consumers better understand the risks and nature of digital assets.

As data privacy gains increasing public attention in Indonesia, the regulation brings the crypto-asset industry in line with emerging national standards. Digital asset traders are now required to obtain explicit user consent for any use of personal data, reinforcing consumer trust and reflecting a shift towards more robust and accountable data protection practices.

Crypto and Blockchain Market Developments

Distributed ledger technology and blockchain as the foundation for Digital Rupiah

Indonesia is currently in the process of creating a central bank digital currency (CBDC), known as the Digital Rupiah, through Project Garuda, a programme initiated by Bank Indonesia. This project is an effort by the central bank to adapt and modernise Indonesia’s monetary system and preserve the sovereignty of the Rupiah in the digital age.

Introduced in 2022, Project Garuda is structured in several phases, namely:

• white paper – introducing the conceptual framework and objectives of the Digital Rupiah;
• consultative paper – seeking feedback from the public and industry on the proposed design and implementation strategies.
• public consultation report – compiling the insights and recommendations of stakeholders; and
• proof of concept (PoC) – conducting technical trials to assess the feasibility and security of the Digital Rupiah.

The Digital Rupiah is the digital form of Indonesia’s official currency, the Rupiah, issued and regulated exclusively by Bank Indonesia. It is designed to function alongside existing forms of money, such as physical cash, electronic money and card-based payments, without replacing them.

Bank Indonesia has currently outlined two types of Digital Rupiah:

• wholesale Digital Rupiah (w-Rupiah Digital) – restricted to financial institutions for interbank transactions, monetary operations and foreign exchange markets; and
• retail Digital Rupiah (r-Rupiah Digital) – accessible to the general public for everyday transactions, including payments and transfers by individuals and businesses.

Through its White Paper on Project Garuda, Bank Indonesia has introduced several guiding principles to shape the development and implementation of the Digital Rupiah, as follows.

• Monetary mandate alignment: ensuring that the development of the Digital Rupiah supports effective monetary policy, including inflation control and exchange rate stabilisation.
• Coexistence with existing payment systems: designing the Digital Rupiah to complement, not replace, current financial instruments and infrastructure.
• Innovation and efficiency: creating a system that not only adopts current technology but also advances the operational efficiency of monetary transactions. These innovations are expected to enhance transaction speed, reduce costs and improve accessibility for all levels of the public.
• Triple-I framework: focusing on integration, interoperability and interconnection to ensure seamless interaction with various financial platforms and services.

During the PoC, the Digital Rupiah utilises distributed ledger technology and blockchain to test the design and business model developed through the public consultations outlined in the consultative paper and public consultation report. The choice of distributed ledger technology and blockchain platforms demonstrates the government’s trust and commitment to leveraging these technologies towards modernising Indonesia’s financial ecosystem.

While no clear deadline has been set, Bank Indonesia officials have said that the Digital Rupiah is part of the central bank’s 2030 Blueprint for Indonesia’s Payment System, suggesting issuance within the next five years.

Increasing public interest in crypto-assets

Between January and November 2023, Bappebti recorded a total crypto-asset transaction volume of IDR122 trillion in Indonesia. In a remarkable surge, the same period in 2024 saw that figure soar to IDR556.53 trillion, with a customer base of 22.1 million individuals. According to Bappebti, this represents a staggering 356.16% increase in transaction volume, with the numbers for 2025 likely to be higher.

This exponential growth highlights the rapidly growing public interest in crypto-assets, signalling a promising opportunity for businesses seeking to enter or expand in the Indonesian digital asset market.

Ethereum Layer 2 networks

Ethereum Layer 2 (L2) solutions have emerged as a significant development in Indonesia’s blockchain landscape, addressing the scalability challenges inherent in Ethereum’s Layer 1. These solutions, such as Optimistic and ZK-rollups, enhance transaction throughput and reduce costs, making blockchain applications more accessible and efficient.

In 2024, Lisk, a prominent Ethereum L2 protocol, partnered with Indonesia’s Gerakan Nasional 1000 Startup Digital to launch Ignit3, the country’s first government-backed Web3 programme. This initiative aims to foster local Web3 start-ups by providing mentorship and resources, highlighting the government’s support for blockchain innovation.

The Indonesian government’s proactive approach includes establishing a regulatory sandbox under the OJK’s authority. This environment encourages experimentation and the development of new technologies, such as blockchain-based technologies including L2 solutions, within a controlled and supportive framework. While Ethereum L2 adoption in Indonesia is still in its early stages, the combination of technological advancements and regulatory support positions the country as a promising hub for blockchain innovation in Southeast Asia.

Non-custodial wallets

In Indonesia, the adoption of non-custodial wallets is gaining momentum as part of the broader digital asset ecosystem. These wallets allow users to maintain control over their private keys, enhancing security and aligning with the principles of decentralisation.

A notable development in the industry is the collaboration between Fordefi and Pintu, a leading Indonesian digital asset trader. In May 2024, Fordefi, known for its wallet solutions, expanded into the Indonesian market by powering Pintu’s Web3 self-custodial wallet offering. This integration enables Pintu’s users to self-custody their digital assets and access decentralised applications, benefitting from advanced security features such as transaction simulation and risk alerts.

This move reflects a growing trend among Indonesian crypto platforms to offer users greater autonomy and security over their assets. As the regulatory landscape evolves, with the OJK assuming oversight of digital financial assets, the role of non-custodial wallets may become more prominent, particularly as user protection and transparency continue to shape policy direction.

Digital assets literacy programmes

To address the increasing adoption of crypto-assets in Indonesia, the OJK has prioritised investor education as a key part of its consumer protection strategy. Through the Crypto Literacy Month (Bulan Literasi Kripto or BLK) 2025 initiative, the OJK aims to help the public better understand both the opportunities and risks involved in crypto investments, as well as the regulatory framework designed to safeguard their interests.

The campaign includes workshops, seminars and outreach programmes conducted in collaboration with industry associations and crypto exchanges. These efforts provide practical guidance to investors, stressing the importance of careful research and awareness of common risks such as scams and market fluctuations.

By encouraging investors/consumers to do their own research and stay informed about applicable regulations, the OJK aims to promote responsible participation in Indonesia’s evolving crypto market. This educational approach is an important part of ensuring the market develops in a way that is both innovative and secure for all participants.

Key Takeaways

The transition of crypto-asset supervision to the OJK has introduced a new layer of regulatory expectations for digital asset businesses in Indonesia. With the issuance of OJK Reg 27/2024, key issues such as capital sourcing, foreign ownership and permissible business models are now subject to closer scrutiny, reflecting the regulator’s intent to promote market integrity and consumer protection.

Simultaneously, developments in blockchain infrastructure, self-custody solutions, and public education initiatives reflect a market that is growing in both complexity and maturity. For legal professionals, these changes present a timely opportunity to reassess compliance strategies, advise on evolving licensing pathways and anticipate how future regulatory interpretations may shape the digital asset space in Indonesia.