The Web3 and crypto industry in Indonesia was just hit by a pretty aggressive regulation update. The financial services authority or OJK has officially tightened the rules for promoting digital assets on social media. This is a big deal because crypto influencers or key opinion leaders (KOL) are now required to hold a competency certification or an official license before they are allowed to give recommendations, analysis, or simply shill coins to the public.
This strict move immediately triggered a massive reaction from the global crypto community. In fact, the biggest crypto data and media platforms in the world like coinmarketcap and coin bureau highlighted this new policy from the Indonesian government at almost the exact same time.
There is a strong reason why global media is busy discussing our domestic regulations. Based on the released data, one of the main triggers for this crackdown is the massive amount of public losses due to online financial scams which reached a fantastic $474 million in the past year alone. On top of that, companies or entities that dare to use the services of unlicensed influencers face a brutal fine of up to 15 billion rupiah or around $835K.
The government seems fully aware that the crypto ecosystem in Indonesia is already too big to be left running without strict legal supervision. Based on market research in southeast Asia, Indonesia currently holds the crown as the country with the highest number of crypto asset owners in the regional area.
From the graph above, Indonesia's dominance looks absolute with ownership numbers breaking past 39 million people far leaving Vietnam in second place and Singapore in the very last spot. This gigantic retail scale is what makes Indonesia a prime target and the sexiest market for global crypto projects.
The uniqueness of the Indonesian market does not stop at the headcount. If we look into the global crypto adoption Index report released by chainalysis, Indonesia ranks 3rd in the world in terms of digital asset adoption by grassroots users.
If you look closer at that Chainalysis sub metric data, there is a mind blowing fact. Indonesia ranks 1st in the world for the Retail Defi (Decentralized Finance) value received category. This means that Indonesian retail traders are super active, tech savvy with Web3, and love surfing directly on chain (like using DEX, liquidity pools, or hunting meme coins) using their decentralized wallets rather than just trading passively on local centralized exchanges.
However, this massive activity is also reflected in other global ownership data where crypto user penetration in Indonesia remains rock solid in the top ten global rankings.
With the fact that around 80% of the total retail investors in Indonesia are young people under the age of 34 (Gen Z and Millennials) who heavily rely on whispers from influencers on Twitter, TikTok, or Telegram to make their entry decisions, this OJK intervention becomes a logical consequence of an industry growing way too fast.
My Opinion
As fellow market players and part of the Web3 community, we must look at this new rule from OJK from two different sides of the coin. On one hand, this is a very positive sign and looks pretty bullish for the long term. Entering strict regulations and moving the supervision to OJK proves that crypto in Indonesia is officially recognized as a formal digital financial asset, no longer just a side commodity or a joke trend. Protecting retail traders from bad influencers who love doing pump and dump schemes or promoting scam projects is definitely needed so that this industry becomes healthier and more credible.
However, on the other hand, this regulation also brings a big challenge and a bit of bitterness for the local content creator ecosystem. The fine of up to Rp15 billion is a very intimidating number for independent educators. We must critically watch how this certification mechanism will be run by OJK later on. We do not want this rule to turn into a rigid bureaucratic wall that kills the creativity of small scale educational creators while the public space ends up being controlled only by a handful of big corporations who can afford the license. Crypto was born from the spirit of decentralization and freedom of information! Hopefully, this regulation comes to clean up our trading space, not to choke education. Stay safe, keep researching, and trade wisely.
Source
- Indonesia Requires Crypto Influencers to Obtain Certification, Bans Unlicensed Promotions
- Indonesia tightens oversight of financial influencers
- Coin Bureau
CoinMarketCap
Posted Using INLEO
