The FTX catastrophe has been disrupting the whole cryptocurrency industry and triggered new legislative processes in many countries like Indonesia. According to many experts, it could just be the beginning.

After filing for insolvency on Friday along with the announcement of its founder’s resignation, the second largest exchange’s users are still struggling to cope with the fact. Widely reckoned as among the influential players in the crypto sphere, many enthusiasts considered FTX’s ecosystem to be too strong to fail. 

Like most parts of the world, Indonesia also saw a whopping cryptocurrency adoption in recent years. In the previous financial year alone, the country saw a huge increase of 1,224% in crypto transactions.

According to The Indonesian Futures Commodity Trading Supervisory Agency or “Bappebti,” the state’s investors traded about 859.4 trillion rupiahs($57.5 billion) last year than 64.9 trillion rupiahs in 2020 in cryptocurrencies. The government is considering employing strict rules to protect its residents’ crypto investments against such a debacle and safeguard its economic sector.

Indonesia To Give Charge For Crypto Sector To Financial Services Authority 

In the latest news from Indonesia, the authorities are considering appointing its Financial Services Authority (OJK) as the cryptocurrency markets’ sole regulator. Indonesia, the largest economic country in Southeast Asia, experienced a remarkable investment boom in the crypto sector in recent years. Currently, the cryptocurrency industry is being regulated concurrently by the state’s Trade Ministry and the Commodity Futures Trading Regulatory Agency. 

The Indonesian Finance Minister, Sri Mulyani Indrawati, said on Thursday that the proposed change is pursuant to their financial sector’s legislation being debated in the parliament. Talking about the meteoric rise of digital currency investors to 15.1 million till June this year, where there were only 4 million Indonesians the previous year, the importance of a “strong mechanism for supervision and investor protection” should not be ignored. 

“We need to build a mechanism of supervision and investor protection that is quite strong and reliable, especially for high-risk investment instruments,” she told a parliamentary hearing, noting that the cryptocurrency market has recently faced turbulence.

The current government submitted the bill to parliament earlier this year in September. This Thursday, a meeting took place to get the parliament’s initial response and any additional provisions for the new legislation. Upon conclusion of the meeting, the finance minister commented that the legislation would empower the OJK to supervise and regulate the financial sector’s technology innovation and digital assets, including cryptocurrencies. 

New Crypto Legislation To Involve Bank Of Indonesia

Per reports, the parliament proposes the addition of its central bank, Bank Indonesia, into the bill to have economic growth and price stability. Once both the executive and legislative branches of the parliament agree to all the provisions, the said bill will become the country’s law.

When asked about the parliament’s proposal, Ms. Mulyani agreed with it but also pressed to recognize the importance of the financial regulator’s independence. She said:

It is important for us to continue to provide signals that independence and credibility of institutions … are strengthened and maintained because this is the most important asset to maintain financial system stability.

Featured image from Pixabay and chart from TradingView.com