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OJK to set rules for local initial coin offerings by end of year

ICOs are similar to initial public offerings (IPOs) in the stock market, but instead of shares, use coins to raise funds. These coins can have utility for financial products, among other things.

Aditya Hadi (The Jakarta Post)
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Wed, January 15, 2025

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OJK to set rules for local initial coin offerings by end of year The Bitcoin logo is seen on a Coinstar cryptocurrency ATM on Jan. 19, 2023, at a grocery store in Washington, DC. (AFP/Stefani Reynolds )

T

he Financial Services Authority (OJK) is seeking to roll out a rule that would pave the way for local initial coin offerings (ICOs) following the agency’s new role overseeing digital assets in Indonesia this year.

ICOs are similar to initial public offerings (IPOs) in the stock market, but instead of shares, they use coins to raise funds. These coins can have utility for financial products, among other things.

Industry players welcomed the plan, noting that the absence of local rules has driven blockchain projects to launch their cryptocurrencies abroad, costing the country valuable opportunities, but a robust safeguard to protect investors from fraud is deemed necessary before moving in that direction.

Hasan Fawzi, the OJK’s executive head for financial technology innovation and digital asset supervision, stated that the agency is gearing up to study and draft its first-ever regulation on digital asset offerings this year.

The move follows the transfer of supervision authorities over cryptocurrencies from the Trade Ministry’s Futures Exchange Supervisory Board (Bappebti) on Jan. 10.

“It’s like ICOs […] So far, there is no regulation in place, so existing [local] players are forced to offer their cryptocurrencies through foreign platforms. This means there is no digital asset offering under local authority,” he said on Jan. 2.

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Hasan emphasized the existence of a global regulatory shift, with authorities worldwide moving beyond debates over the legality of cryptocurrencies to focus on establishing sufficient frameworks for oversight and protection.

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