Crypto Legality in Indonesia Impacts the Growth of the Country Economic Income

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For some countries, Cryptocurrency still seems to be a confusing rule and consideration for some rulers in certain areas. Some countries even prohibit crypto transactions in their country because they consider various economic factors and the impacts that will be caused. But now progress has been proven that not a few countries in the world have issued policies and legalized the buying and selling of cryptocurrencies.

In a number of countries, policies that are still ambiguous make some inspectors lose their minds and are overshadowed by fear. This, of course, scared them, because it would be uncomfortable if their assets would be confiscated by the state because they had made illegal transactions or investments. It will also encourage some investors to openly enter prisons and live their lives in vain in prison.

In a number of countries the place is still overshadowed by a sense of worry and fear that will get rid of FIAT in their country. It is indicated that it will be able to change the economy and damage the country's economy, including it will plunge them into the inflation rate. Doubts about this may be caused by the level of knowledge or governance and management of the country in the financial sector which has not developed significantly at all.

I, as a student in the law department, am interested in going into detail about this, so that we in Indonesia can openly welcome technological developments, including in the crypto sector. In Indonesia, we are open to the presence of various technologies and developments, including in the field of crypto and blockchain. Our government has issued a very extraordinary policy by welcoming enthusiastically about buying and selling crypto transactions.

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It seems that our government is aware of how this technological opportunity can increase state revenues through various policies that are determined to legalize long-term exchange trading transactions regarding the buying and selling of crypto and other digital asset values. Bitcoin and other cryptocurrencies are termed as something that has a long-term investment value made in a regulation which is then referred to as a digital asset that can be traded. Understanding these values ​​has changed the mindset of stakeholders to determine policies that have more impact on all groups.

Indonesia, which we know as one of the developing countries in Indonesia, seems to be smart and has extraordinary views and arguments about Blockchain technology. Open-mindedness and governance in a policy are the main basis for countries to continue to develop and be open to accepting technological advances. It is inevitable that technological progress will continue to develop, and our dependence on technology will become something that is truly realized.

Crypto appears to be a quite extraordinary opportunity in increasing financial income and economic growth for Indonesian citizens and the state in particular. Then technological advances in the blockchain field which may be adopted by the government in terms of efforts to reduce criminal acts as well as fraud or corruption as well as investment in state funds or income. Corruption is a fairly crucial problem and has occurred for many years in Indonesia, by adopting this Blockchain transaction system, it allows the government to reduce these corrupt acts.

Blockchain as one of the most extraordinary technologies can transfer various data with algorithmic codes that are presented, and are difficult to reach by criminal acts, fraud and forgery. Policies regarding the legality of crypto trading, became the initial basis for the government to adopt the technology. My analysis is focused on determining this policy that will allow our government to adopt this technology.

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Instead of determining policies on the legality of crypto trading transactions, it turns out that this actually brings benefits to the financial and economic improvement of developing countries. Crypto legality has been issued since 2019 by the Ministry of Trade (Kemendag) through the Futures Trading Supervisory Agency (CoFTRA). The regulation is stated in CoFTRA Regulation Number 5 of 2019 concerning Technical Provisions for the Implementation of the Physical Crypto Asset Market on the Futures Exchange.

In the policy or rule, it only states that the legality of the transaction or trading of buying and selling cryptocurrencies. The regulation has regulated how Indonesia has legalized trading transactions for the type of crypto which is referred to as a commodity that can be traded as a digital asset investment tool. However, the regulation does not contain rules regarding payment transactions made with cryptocurrencies.

On the other hand, the government has regulated this, that it cannot make payments for buying and selling goods or products using crypto. So the rules issued are just about legalizing investment trading transactions about crypto. This cannot create value for crypto to become a medium of exchange as a means of payment in Indonesia.

In Indonesia, we can trade in exchange groups or what are known as digital asset commodities on various trading exchanges that have been legalized or legally authorized by the Indonesian government. However, we cannot use this First Brigade as a medium of exchange when we buy a product or service because it is an act that is prohibited in Indonesia. Our country's policy has determined that buying or selling an item that makes a transaction cannot be done as a medium of exchange other than Rupiah FIAT money.

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Buying and selling products by making payments using cards as a medium of exchange will actually plunge us into prison. Prohibition of payment transactions using a medium of exchange other than Rupiah will be subject to criminal sanctions. This has been regulated through our government policy in Law Number 7 of 2011 concerning Currency.

So currently we can only invest in crypto trading, but cannot use crypto as a means of payment. The legality of the script to seems to actually bring benefits to the Indonesian state. Recently our government has also issued a new regulation regarding crypto investment, which in the latest article has set about taxation.

One of the supporters of state revenue is through the collection of taxes paid by citizens and that also applies in our country in Indonesia. As good citizens, we always pay taxes imposed by the state on activities using public services facilitated by the state. Taxes can support and support per capita income in the growth of Indonesia's economic program.

The government has looked at new opportunities and adopted policies on crypto that can support economic growth. The government has issued regulations on taxes in the crypto field. Every activity of buying and selling transactions will be subject to taxes issued legally through government regulations listed in the Indonesian government law.

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Crypto actually brings benefits to our country which will have an impact on our financial growth and economic progress. The economy will be able to support in terms of national development as well as policies in the distribution of public services that can prosper the citizens. The government again takes policies that can provide extraordinary benefits to growth in the economic sector to increase the welfare of the country through taxes.

Crypto transactions will be taxed around 0.1 percent-0.2 percent which will take effect from 01 May 2022. The regulation has been stated in the Minister of Finance Regulation (PMK) Number 68/PMK.03/2022 concerning VAT and Income Tax (PPh) on Crypto Asset Trading Transactions. This regulation actually provides benefits for the Indonesian state.

However, not a few investors and project developers have appealed against this policy which is considered to be detrimental to investment actors. However, in various considerations, the government has given justice to crypto investors. This is stated as a form of justice for the state, electronic service providers, and crypto investors.

The Indonesian government seems quite observant in seeing opportunities to increase the country's economic growth. Giving legality to crypto trading transactions is one of the steps to determine tax rules that can impact state revenues. Nevertheless, this policy has provided a sense of security and comfort for investors because it has been protected by a legitimate and clear policy.

This article is an original post that I made based on the analysis I did and quoted from the following sources: 1, 2

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