China recently reiterated its long-standing opposition to the use of digital currencies, stating that all Bitcoin transactions are illegal. Indonesia, however, will not go down this road, a senior government official has stated. Instead, it will seek to regulate the field to protect investors.
When China’s central bank announced the ban, the digital currency market went into a frenzy, with some of the top tokens losing up to a fifth of their value. In response, some of the largest exchanges including Huobi and Binance have ceased opening accounts for Chinese users, with the former saying it will retire all mainland Chinese accounts by midnight December 31.
One Asian nation that has seen a rapid rise in digital currency adoption is Indonesia, and Minister of Trade Muhammad Luthfi recently made it clear that the island nation is not following the China route.
“We don’t prohibit it, but we will tighten the regulations,” Muhammad Luthfi told a local outlet.
Indonesia, a country made up of over 17,000 islands, has seen steady growth in digital currency adoption in the past 18 months, local paper Jakarta Globe reports. The Futures Exchange Supervisory Board (Bappebti), which oversees the industry, revealed that trading volume in 13 local exchanges which it oversees is up an average of 40% to $19 billion in the first five months of the year.
The number of digital currency traders and holders has also gone up from 4 million to 6.5 million. This is higher than the number of Indonesians who have invested in the stock market which stands at 5.6 million.
Luno, one of the largest exchanges in the country, is among the platforms that have benefitted massively from the uptake. It stated last week that it’s confident it will triple the number of users it currently has, which currently stands at 700,000.