Young Indonesian Investors Leading The Crypto Charge - A Call For Stronger Regulations

A recent study have found that the majority of crypto investors in Indonesia are millennials.

This highlights a strong youth presence in the country's crypto landscape, based on the recent study from the Indonesian Community Futures Trading Regulatory Agency. (Bappebti)

Young Indonesians fueling crypto growth

The research showed that over 60% of the crypto investors in the country are aged between 18 to 30 years old. The report also showed that 26.9% of its crypto investors are between the age of 18-24, while 35.1% of investors are between the age of 25-30.

The study also reported that the total volume of September crypto asset transactions had reached 33.7 trillion Rupiah, about $2.1 billion, and the number of crypto users in Indonesia was 21.3 million.

In September alone, crypto trading volume in Indonesia reached 33.7 trillion Indonesian rupiah, and the user base hit 21.3 million. Some of the most popular assets among Indonesian traders are Tether (USDT), Ether (ETH), Bitcoin (BTC), Pepe (PEPE), and Solana (SOL).

Bappebti urge to reassess Indonesia's regulations

Indonesia recognised crypto assets as a commodities, which means that the Indonesian government has established a proper framework for crypto trading.

Still, users do still face regulatory constraints, one of which being the dual tax system for crypto transactions. In 2022, Indonesia introduced a 0.11% value-added tax and a 0.1% capital gain tax on crypto transactions.

Despite these constraints, this hasn't stopped investors from dabbling in crypto assets.

Bappebti (Indonesia's Commodity Futures Trading Regulatory Agency) has requested a reassessment of this tax policy, stating that crypto could soon become an integral part of the country's economy.

"Cryptocurrency will one day become part of the financial sector, hence we should expect a commitment from the Directorate General of Taxes to evaluate these taxes."

Apart from the taxation regulations, Bappebti is also asking the Indonesian government to reevaluate its regulation to ensure a more secure investment environment.

Recently, Bappebti extended the compliance deadline for Indonesian crypto exchanges to meet standards needed for a physical Crypto Asset Traders license. This extension, effective until late November 2024, is part of Bappebti's ongoing commitment to investor protection and market integrity under Regulation No.9 of 2024.

Indonesia collaboration with Binance to tackle crypto fraud

In an effort to combat crypto fraud, Bappebti partnered with Binance's Financial Intelligence Unit(FIU) and the Indonesian exchange Tokocrypto to collaborate with Indonesia's Criminal Investigation Agency.

This join operation resulted in multiple arrests and the recovery of approximately $200,000 in fraudulent assets.

Crypto's attraction to youths

The demographics of crypto users in Indonesia is a broader reflection of the attraction crypto has on youths all around the world.

A survey in the United States showed a similar trend; 20% of Gen Z adults and 22% of millennials are more likely to invest in crypto assets compared to the older generations.

In 2023, Bitget study featuring 255,000 respondents in 26 countries showed that 46% of millennials across major economies own cryptocurrencies.