Indonesia to require crypto products to pass regulatory sandbox or be deemed illegal

• The Indonesian Financial Services Authority (OJK) will take over regulation of the crypto industry from commodity agency Bappebti in January 2025.

• Crypto companies will have to pass an assessment in a sandbox environment by the new regulator before receiving permission to operate in the country.

Crypto companies will need to be assessed in a regulatory sandbox before being allowed to operate in Indonesia once supervision of the sector transfers to the Financial Services Authority (OJK) in January 2025.

“This fits our spirit at the OJK, especially when it comes to consumer protection and education,” Hasan Fawzi, the regulator’s supervisory head for financial technology, digital financial assets and crypto, said during of a press conference. briefing Tuesday. “We hope that our regulatory mechanisms will have a direct impact on preventing fraudulent investments.”

Companies that offer services in the country without being assessed in the sandbox will be considered operating illegally.

A regulatory sandbox serves as a testing and innovation development space to evaluate products and ensure they are safe and reliable. It provides an isolated environment for conducting trials that help strengthen security and responsible management in the financial sector.

The sector is currently overseen by the commodities and futures trading regulator, Bappebti, as crypto assets are classified as commodities. Once under OJK’s oversight, cryptocurrencies will most likely be reclassified as financial instruments.

The regulatory sandbox also allows crypto companies to get used to the regulations and supervision applied by the OJK, Hasan said: reiterate a position from the beginning of the month.

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