What is the legality of Bitcoin/Blockchain as a commodity and financial technology in Indonesia?
DAFTAR ISI
INTISARI JAWABAN
According to Bappebti Regulation 13/2022, Crypto Assets are intangible commodities that take the form of digital, using cryptography, information technology networks, and distributed ledgers, to regulate the creation of new units, verify transactions, and secure transactions without interference from any parties.
Then, bitcoin is one form of New Payment Method in the form of virtual currency. Meanwhile, blockchain is a decentralized renewable digital technology and is the basis of the system used in Crypto Assets.
So, what is the legality of bitcoin and blockchain as commodities and financial technology in Indonesia?
Please read the review below for a further explanation.
This article is an update from the article entitled The Legality of Bitcoin as a Commodity and Blockchain as a Financial Technology in Indonesia, written by Sovia Hasanah, S.H., and published on Tuesday, 9 January 2018.
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Definition of Crypto Assets
Before answering your question, we should first understand what Crypto Asset means. According to Article 1 number 7 Bappebti Regulation 13/2022, Crypto Assets are intangible commodities that take the form of digital, using cryptography, information technology networks, and distributed ledgers, to regulate the creation of new units, verify transactions, and secure transactions without interference from any parties.
In its development, Crypto Asset was first created through a coin called bitcoin. Summarize from The Legality of Bitcoin According to Indonesian Law, bitcoin is a form of New Payment Method in the form of virtual currency and is cash stored in a computer that can be used to replace cash in online buying and selling transactions. Then, for information, bitcoin was first traded by Laszlo Hanyecz in 2010 which was used to buy 2 servings of pizza worth $10,000. Although first established in 2010, bitcoin commodity value development continues to increase yearly with high volatility and fluctuation.[1]
Belajar Hukum Secara Online dari Pengajar Berkompeten Dengan Biaya TerjangkauMulai DariRp. 149.000
Crypto Asset was originally designed as a non-convertible means of payment through a peer-to-peer system and is used without bank or government intervention. The Crypto Asset transaction system comes to provide an efficient and easy solution, especially for cross-border payments.[2] However, the increase in traders who continue to invest has reduced government intervention in providing legal certainty for Crypto Asset transactions. So in Indonesia, in its development, the government made several efforts to improve the legality of Bitcoin and make Crypto Assets a commodity instrument.
Crypto Asset is a classification that falls into commodities, so its application cannot be compared to a medium of exchange such as money. This is also supported by Article 1 Number 1 Law 7/2011 which states currency is money issued by the Unitary State of the Republic of Indonesia from this point onwards is referred to as Rupiah.
The basis of the government's evaluation in prohibiting Crypto Assets as a medium of exchange is the pseudonymity and anonymity of Crypto Assets.[3] With this nature, in our opinion, it will be easily misused for criminal activities, such as money laundering, terrorism, and narcotics trafficking.
Crypto Asset is only recognized as a commodity (asset) that can be traded, not as currency. For now, Crypto Assets can only be traded through authorized Physical Traders of Crypto Asset in Indonesia as registered in Bappebti Regulation 13/2022. This is in line with the provisions in Article 1 number 9 Bappebti Regulation 13/2022, which states:
Prospective Physical Traders of Crypto Assets are parties who have obtained registration certificates from the Head of Bappebti to conduct transaction activities in relation to Crypto Assets either on behalf of themselves and/or facilitate Crypto Asset Customers as long as the Futures Exchange for Crypto Assets and the Futures Clearing Agency for Crypto Assets have not formed.
Definition of Blockchain
Quoted from Measuring the Legal Risks of Blockchain for Industry, blockchain is a decentralized renewable digital technology. Furthermore, blockchain technology can enable transactions with distribution recorded in a digital ledger or distributed ledger technology. Broadly speaking, blockchain is the basis of the system used in Crypto Assets. Then, according to Article 20 section 1 letter b Bappebti Regulation 8/2021, in preparing and implementing the Standard Operating Procedures, the Crypto Asset Storage Manager must pay attention to the governance and Crypto Assets storage one of which is to have storage capabilities that support Crypto Assets on various types of blockchain protocols by paying attention to the security of communication connections.
Thus, in our opinion, the existence of Crypto Assets must support an adequate blockchain system. In addition, Article 24 section (3) letter b Bappebti Regulation 8/2021 also states that one of the requirements for Physical Traders of Crypto AssetsOrganizers must have 1 expert in the field of blockchain and Crypto Assets.
The Connection between Crypto Assets and Financial Technology
Specifically in relation to financial technology, Article 1 number 34 Law 4/2023 explains that Technology Innovation within the Financial Sector (Inovasi Teknologi Sektor Keuangan), from this point onward is referred to as ITSK, is a technology-based innovation that has an impact on products, activities, services, and business models in the digital financial ecosystem. Thus, in our opinion, in relation to financial technology, the subject of "digital ecosystem" is part of the technology in financial instruments that fall under the category of Digital Financial Innovation.
Then, Article 213 letter h Law 4/2023 states that one of the scopes of ITSK is activities related to digital financial services, including crypto assets. So, when referring to the criteria for financial-based technological innovation as mentioned above, the Crypto Asset trading model can be considered as a technological innovation that uses blockchain technology.
In its existence, Crypto Assets can be used as a commodity (asset) trading instrument, and the function of Physical Traders of Crypto Assetsmust be applied to relevant regulations because it resembles services in financial institutions.[4] Even though, Crypto Asset is not considered a payment instrument, its existence as a commodity makes Crypto Asset an investment instrument like other commodities traded through trading exchanges.
Based on the explanation above, according to our opinion, innovation in financial sector technology, especially in Crypto Assets, is very important to ensure the value of Crypto Asset stability. One of them is by limiting and tightening the rules related to Crypto Assets in Indonesia. Through Law 4/2023, the expansion of the authority of Crypto Assets is also covered by ITSK. In addition, with this innovation, it is expected that the value of Crypto Assets can become more stable, open up new opportunities for investors, and encourage wider adoption in terms of financial technology.
Furthermore, with the rules that shape the implementation of ITSK, we assume the government is trying to legalize bitcoin as a financial technology in Indonesia. Then, it is important to underline that bitcoin in Indonesia is a commodity. With the increase in the number of Crypto Asset investments, the public needs the precautionary principle from the government to limit the regulation of bitcoin so that it does not violate the law.
In conclusion, in order to provide aspects of legal certainty for the Crypto Asset user community in Indonesia, the government established the implementation of ITSK as a protection forum for financial sector activities. Furthermore, answering your question regarding blockchain as a commodity, the definition of blockchain itself is a system used in Crypto Assets. From this, the blockchain system is regulated to have adequate facilities and not as a commodity, but as a system that helps Crypto Asset trading.
Anil Gaihre (et.al).Do Bitcoin Users Really Care About Anonymity? An Analysis of the Bitcoin Transaction Graph. Journal of University of Massachusetts Lowell, 2018;
Michal Polasik (et.al). Price Fluctuations and the Use of Bitcoin: An Empirical Inquiry. University of Leicester, Paper of School of Management, 2015;
Rusno Haji. Urgensi Penerapan Kerangka Regulasi Aset Kripto yang Komprehensif, Adaptif, dan Akomodatif. Trade Policy Journal, Vol. 1, 2022;
Ulrich Bindseil dan George Pantelopoulos. Towards the Holy Grail of Cross-Border Payments. European Central Bank, ECB Working Paper, No. 2693, 2022.
[1] Michal Polasik (et.al). Price Fluctuations and the Use of Bitcoin: An Empirical Inquiry. University of Leicester, Paper of School of Management, 2015, pp. 13-14.
[2] Ulrich Bindseil dan George Pantelopoulos. Towards the Holy Grail of Cross-Border Payments. European Central Bank, ECB Working Paper, No. 2693, 2022, p. 24.
[3] Anil Gaihre (et.al).Do Bitcoin Users Really Care About Anonymity? An Analysis of the Bitcoin Transaction Graph. Journal of University of Massachusetts Lowell, 2018, p. 3.
[4] Rusno Haji. Urgensi Penerapan Kerangka Regulasi Aset Kripto yang Komprehensif, Adaptif, dan Akomodatif. Trade Policy Journal, Vol. 1, 2022, p. 37.
