Indonesia Will Require Crypto Products to Pass Through Regulatory Sandbox or Be Deemed Illegal

Indonesia’s Financial Services Authority (OJK) will take over the regulation of the crypto industry from the commodities agency Bappebti starting in January 2025. In order for crypto firms to operate legally in the country, they will need to go through an evaluation process in a regulatory sandbox, which will be conducted by the new regulator. The sandbox serves as a testing environment to ensure the safety and reliability of crypto products. Hasan Fawzi, the head of supervision for financial technology, digital financial assets, and crypto at OJK, emphasized the importance of consumer protection and prevention of fraudulent investments through regulatory mechanisms. Firms that offer crypto services without going through the sandbox evaluation will be considered to be operating illegally. The move to OJK’s oversight is expected to lead to the reclassification of crypto assets as financial instruments rather than commodities. This regulatory sandbox will also help crypto businesses familiarize themselves with the regulations and supervision enforced by OJK.