Bappebti Approves Zipmex, Indonesia’s First Official Crypto Exchange Provider

Despite its widespread use and growing popularity, not every government has been keen on accepting Bitcoin as legal currency. In Indonesia, the central bank banned its use as currency towards the end of 2017. However, the Indonesian government allowed the Futures trading of cryptocurrency soon after.

In February, the Indonesian Commodity Futures Trading Regulatory Agency (known as BAPPEBTI) required that cryptocurrency platforms wanting to operate in the country would need to seek approval from the agency.

Earlier this month, Zipmex became one of the first crypto exchange providers allowed to operate in the country.

With BAPPEBTI Approval, Zipmex Allowed to Operate in Indonesia

Since February of this year, following the agency’s ruling that bitcoin would be treated as an official commodity, all crypto exchanges wanting to operate in Indonesia must first register with BAPPEBTI.

The move allowed top companies to trade the asset on stock exchanges legally but also meant that cryptocurrency exchanges wanting to operate in Indonesia would need to first seek BAPPEBTI approval.

To be granted approval by BAPPEBTI, a trading platform needs to prove that they have controls in place to manage risk and secure transactions.  These requirements are designed to give protection to traders from fraudulent transactions.

The trading platform, headquartered in Singapore, is one of the first to be allowed to operate in Indonesia. BAPPEBTI has previously approved crypto exchange Tokocrypto, as well as Indodax, Indonesia’s largest cryptocurrency firm.

Like other bitcoin platforms, Zipmex supports the trading of bitcoin between fiat currency and BTC. The Zipmex platform currently supports fiat-to-bitcoin trading in Australian, Singaporean and U.S. dollars, as well as Thai Baht. Approval from the agency will allow the company to trade bitcoin against the Indonesian fiat, Rupiah.

The Impact of Zipmex’s Expansion Into Indonesia

The approval was the most recent in a string of recent successes for Zipmex in the Asia-Pacific Market. The trading platform had earlier received permission to operate in Australia. Zipmex is also one of the few exchanges granted a license to operate in Thailand.

The country’s SEC has so far granted only four of 20 platforms license to operate in the country and trade in Thai Baht. 

In the past, Indonesia has lagged behind other major nations in terms of total available cryptocurrency exchanges. In 2019, the country was home to the lowest number of cryptocurrency exchanges, both among G20 nations and nations in the Asia-Pacific region, according to a report from Crystal.

Zipmex’s approval, however, may be a sign that this is beginning to change, and that major players in bitcoin will more aggressively target the Indonesian market.

Indonesia’s digital economy is expected to more than triple over the next ten years, according to a report from Google. At the same time, global Bitcoin use is trending upwards.

It’s possible that more and more businesses in the Asia-Pacific market will start taking necessary steps to accept cryptocurrency as the bitcoin market continues to expand. More platforms may soon consider adopting the controls needed to gain approval for the Indonesian market.

However, the path forward may be challenging for all platforms to navigate. Traders wanting to operate in Indonesia will need to clear the regulatory hurdles that BAPPEBTI has currently in place, which is easier said than done.

In addition to the regulations on exchange security and risk management, platforms also need to be able to transfer one trillion Rupiah (approximately $71.3 million) in capital and keep 800 billion rupiah (around $54 million) in their accounts.

Some traders have already complained that the capital requirements are too high. While the amount may be reviewed and lowered in the future, it’s likely to price smaller platforms out of the country for now.

Indonesia Allows New Bitcoin Platform

Despite Bitcoin’s growing popularity, not every country has been quick to allow its use as currency, or to support bitcoin-to-fiat trading. Indonesia, which has traditionally been restrictive with regards to the use of Bitcoin, has allowed  Zipmex to act as one of the country’s few cryptocurrency exchanges. 

While Indonesia hasn’t been a significant bitcoin market in the past and had one of the lowest numbers of bitcoin exchanges in 2019, Zipmex’s approval could be a sign that this is changing. Other platforms wanting to trade in the country, however, will face steep barriers to approval from BAPPEBTI.