The Future of Cryptocurrency in Indonesia

Naufal Shalhan Adani

Have you ever heard of cryptocurrency? Most of us must have heard it, especially in advertising, social media, even television. The investment trend on crypto is global and no exception to Indonesia. Indonesia, which has the total number of the 4th largest population in the world has a bright future in this crypto market to build economic forces. So, have we ever asked, why can it happen? Let's discuss.

1

What is crypto assets?

The basic thing we need to understand is what crypto assets are. Crypto assets are cryptocurrencies or assets that have been given tokens, which are transferring objects to the blockchain. Tokens can be photographed for broader ownership distribution, such as dividing the ownership of assets into stocks, but these shares are digital, source investment available (Team, 2022). Simply put, crypto assets are digital assets using crypto as a digital transaction tool.

Cryptocurrencies have decentralized characteristics, meaning not controlled by one central government (or central bank). This means the value of cryptocurrency does not depend on inflation and other economic turmoil caused by banks or even governments. Blockchain technology contained in Cryptocurrency is considered a financial technology in the future (Saputra, 2018). Then what is your relationship with economic growth in Indonesia?

2

How is it in Indonesia? Does it depend on the crypto industry?

We have understood that crypto assets are digital assets, which means we invest or have ownership rights. Simply put, this is the same as we invest in the company. If we continue to guide forward, there is an opportunity where Indonesia can develop with the Crypto market industry.

In the population, Indonesia is ranked 4th with the largest population in the world. Data taken from the CCN Indonesia Resmis web, it is stated that the number of Crypto assets investors in Indonesia has penetrated 6.5 million people. That number rose rapidly from the record of the Ministry of Commerce at the end of 2020 which touched 4 million people. Plus, the number of Crypto assets investors defeated the number of investors in the capital market. Indonesian Central Securities Custodial Data (KSEI), the number of Single Investor Identification (SID) Capital Market reached 5,088,093 investors in April 2021.

From the data, we can see that Indonesia has a great opportunity at Crypto Asset which defeats the number of investors in the capital market. Therefore, this data also shows the enthusiasm of large Indonesian people in crypto assets.

In the next 2030 digital economic trade will grow rapidly 8 times than now or from Rp632 trillion to Rp.4,531 trillion in 2030. That number is 18 percent of the total national GDP, clear Minister of Trade Muhammad Lutfi taken from the official website of CNN Indonesia (2021).

Therefore, there is great potential in Indonesia in building a crypto industry. However, what kind of potential does Indonesia have? Is it a big population?

3

What is the potential for Indonesia to Crypto-assets?

There are several things that make Indonesia have great potential. In the data adoption of the Crypto Indonesia market. The number of crypto asset users is still smaller when compared to the total population of Indonesia, which is 2.66%. Then, if we compare the data in the Southeast Asia region, Indonesia is still inferior to Vietnam at 6.12% and Malaysia at 3.15%. Even though the potential of Crypto markets in Indonesia can become No. 5 or even the largest number 3 in the world. Well, how can it be?

Source: https://triple-a.io/crypto-ownership

If we take a closer look, Indonesia has a high market attractiveness because Indonesia has a free market that is eyed by investors, as mentioned by the Indonesian Minister of Trade, Muhammad Lutfi, plus its population is ranked 4th largest in the world. With this crypto market, Indonesia is well-positioned to increase its economic strength in the crypto market industry. In addition, Indonesia's position is even more strategic, because other countries with large populations such as China and India prohibit their residents from using crypto assets in their countries. As data taken from the official website of CNBC Indonesia, the two countries strictly prohibit any actions related to crypto.

Internet distribution penetration in Indonesia is also carried out continuously. This is because Indonesia's biggest needs are support from the government so that the Indonesian digital industry can overcome lagged by other countries. Internet penetration must be quickly improved. Not only focused on Java but also spread in other areas. The government must also open the way and provide various ways that the digital industry in Indonesia can grow and get access to funding (Rahmayani, 2015).

Therefore the position of Indonesia on crypto-assets is very strategic because China and India are hampered by its government regulation. In Indonesia alone, we are given regulations that are quite easy and friendly by the government, many populations, plus the penetration of the use of smartphones and the internet that continues to expand. But in fact, Indonesia is still left behind with other countries. Therefore Indonesia has a large space and opportunity to develop into a more advanced country.

On the other hand, there are still many Indonesian people who want to be a business actors in the development of the crypto industry. It is very unfortunate, Indonesia has a large market attractiveness but the population is still silent in place and does not want to open. Plus, the crypto industry in Indonesia is not just a trading asset but has other more real functions.

Hopefully, this article is useful especially to build interest in domestic crypto industries.