A financial watchdog in Indonesia has outlined new rules for cryptocurrency futures exchanges. Futures are essentially an agreement to sell or buy a cryptocurrency asset on a set date in the future at a defined price, irrespective of the price is on the set date. It’s a tool that’s used to manage risk rather than to maximize profits.
Bappebti, the Commodity Futures Trading Regulatory Agency, which is an agency within Indonesia’s Ministry of Trade, has announced these new rules on Monday. The new rules state that the cryptocurrency futures exchange needs to be registered as well as approved before they operate. The agency also verified that any crypto assets are now formally acknowledged as commodities, a decision that was first reported last June. This means that they can now be transacted on Indonesia’s futures exchange.
Indrasari Wisnu Wardhana made a statement on Monday and said that these rules had been established to offer legal certainty in the cryptocurrency futures division, in addition to protecting investors and consumers.
Bappebti said, in their document outlining the rules and the registration requirements, that futures exchanges, in addition to clearinghouses which deal in cryptocurrencies, need to have capital of a minimum of 1.5 trillion Indonesian rupiahs (which equates to $106 million) and they must also keep a closing balance of a minimum of 1.2 trillion Indonesia rupiahs (which equals around $85 million).
Moreover, they also need to have a “good level of system security” as well as at least three CISSP employees (Certified Information System Security Professionals). There also needs to be a process of risk assessment, according to the agency, which includes being compliant with combating the financing of terrorism (CFT) and with anti-money laundering (AML).
Additionally, Bappebti’s rules state that futures storage service providers and traders of crypto assets must also seek approval before beginning operating and they must also maintain a minimum capital of 1 trillion Indonesian rupiahs ($71 million) and a closing balance that’s at least 800 trillion Indonesian rupiahs (around $57 million).
For clarification, the new regulations don’t apply to ICOs (initial coin offerings). It is reportedly still forbidden to use cryptocurrency as a way of paying in Indonesia. Reuters states that Indonesia’s traders in crypto assets are not happy that the agency has established the minimum required capital as high as it has, claiming that the development of the nascent market will be held back.
Indodax CEO, Oscar Darmawan, told Reuters that the capital requirement is more than what is needed to launch a rural bank in the country and it is also much higher than the minimum capital for futures traders of commodities that are more traditional.
What are your thoughts on the new rulings by Bappebti?