Crypto Firms to Undergo Regulatory Sandbox Evaluation Before Licensing in Indonesia
Starting in January 2025, crypto firms seeking to operate in Indonesia must undergo evaluation in a regulatory sandbox before being licensed. This regulatory change will come into effect as supervision of the crypto industry transitions to the Financial Services Authority (OJK).
Firms offering crypto services in Indonesia without undergoing evaluation in the sandbox will be deemed to be operating illegally.
A regulatory sandbox is a crucial testing ground for evaluating financial products and services’ safety, reliability, and innovative potential. It provides an isolated environment where trial runs can be conducted to enhance security measures and promote responsible management within the financial sector.
Indonesia’s crypto industry currently falls under the supervision of the commodities and futures trading regulator, Bappebti, as crypto assets are categorized as commodities. However, with the upcoming transition of oversight to the Financial Services Authority (OJK), crypto assets are expected to be reclassified as financial instruments.
Hasan Fawzi, Chief Executive of the Supervision of Financial Sector Technology Innovation, Digital Financial Assets, and Crypto Assets, highlighted that once the OJK regulates crypto assets, they will also need to undergo evaluation in a regulatory sandbox. He said:
“I think this is our spirit at OJK, especially in consumer protection and education. We really hope that all of our regulatory mechanisms will be present and have a direct impact on preventing fraudulent investments.”
Fawzi emphasized the importance of regulatory mechanisms in preventing fraudulent activities and stated that crypto companies with new products or business models must participate in the sandbox. Failure to do
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