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Whatsapp is Close to Launching Digital Payments in Indonesia

Whatsapp, the Facebook-owned messaging platform has been engaging in preliminary talks with multiple Fintech establishments to launch digital payments in Indonesia.

The digital payment system by Whatsapp could become the second country globally where it will be launched, as reported by Reuters. Facebook’s dealings with digital wallets could become a template for Whatsapp to adopt in other emerging markets to get around Indonesia’s regulations regarding foreign companies.

Collaboration discussions are currently taking place with transportation booking service Go-Jek, Ant Financial backed DANA, Lippo Group and Grab backed Fintech startup OVO as well as the state-owned Bank Mandiri.

Indonesia is currently one of the top five markets globally for Whatsapp, with India being the top country on the list. The launch of the digital payment system will be expected in 2020, at the same time or after Whatsapp Pay in India has been launched.

Facebook is currently still waiting for regulatory approval from India before they can launch digital payment systems through Whatsapp, and approval from the regulators in Indonesia is needed before proceeding with the launch.

Blockchain Technology Implemented into Indonesia's Digital Economy

Indonesia’s digital economy market projected at US$100 billion by 2025
Indonesian e-commerce transactions have surged by 151% since 2017
Internet penetration in Indonesia stood at 64.8% of Indonesia’s total 264.7 million population

Bank Central Asia (BCA) is campaigning for Indonesian financial businesses to innovate and adopt blockchain technology to support its digital economy amidst rapid technological revolution.

Indonesia is currently the third-largest digital market in Asia behind China and India and is projected to be a very lucrative prospect in terms of the digital economy market which has driven BCA’s initiative to encourage the adoption of blockchain technology.

Google projected Indonesia’s digital economy to reach US$27 billion in 2018 in the Southeast Asia Economy report. Bank Indonesia’s data revealed that Indonesia’s e-commerce transaction stood at Rp77.766 trillion in 2018, which is a 151% increase compared to 2017’s Rp30.942 trillion. In 2025, Indonesia’s digital economy market has been forecasted to rise to US$100 billion.

Indonesia’s digital economy potential is further confirmed with a significant number of active internet users. According to a report by the Indonesian Internet Service Providers Association (APJII), at least 171.17 million of the total 264.7 million Indonesian population are connected to the internet, with 90% using their smartphones to access the internet.

To drive the adoption of blockchain technology innovation, BCA will hold its annual IT competition the Financial Hackathon (Finhacks) 2019. The competition is entering its fourth year in Indonesia and will focus on the application of blockchain technology to support the financial industry.

Image via Wikimedia Commons

Indonesia’s Chronic Crop Data Problem Solved by Blockchain

Indonesia has been a victim of unreliable crop data, and this has hindered the optimality of its agricultural sector. This nation has been grappling with the lack of accurate data when it comes to issues, such as crop output. HARA, a Jakarta-based startup, seeks to address this challenge by deploying blockchain technology.

According to Bloomberg, HARA has started utilizingblockchain in collecting and managing farm data, such as pest infestation, grains transaction, soil and crop conditions, cultivation process, and land ownership.

Regi Wahyu, HARA’s CEO, notes that blockchain will be instrumental in enhancing farmers’ livelihood as they will be given more insights based on the data collected.

Wahyu stipulated:

“Our mission is to provide rural smallholders access to various farm goods, financing and crop insurance. The holy grail for accessibility is availability of accurate and transparent data which can help farmers in getting loans to finance their production.”

HARA intends to work together with Indonesia’s Agriculture Minister in developing reliable agriculture data through blockchain.

As reported by Blockchain.News on Oct.18, Farm to Plate, a blockchain-enabled provenance tracking portal by Paramount Software Solutions, is set to address the challenge of recalls witnessed in the food & beverage sector.

Image via Shutterstock

Tokocrypto Gets Green Light as First Indonesian Crypto Exchange

Tokocrypto becomes the first cryptocurrency exchange platform to be approved by the Indonesian government. This approval could mean a significant boost in the trading of cryptocurrency assets in this nation.

Tokocrypto has acknowledged that this registration will enable traders to avert legal concerns. This will be instrumental in permitting them to sell and buy cryptocurrency assets, such as Ethereum and Bitcoin, on the platform with more certainty and confidence.

Indonesia’s thriving digital economy

According to a report by Temasek and Google, Indonesia’s digital economy is speculated to quadruple to US$ 133 billion by 2025 from the current US$40 billion.

Tokocrypto’s interest in the Indonesian market can be linked to this trend because it was founded in 2017 by Pang Xue Kai, a Singaporean entrepreneur.

Having being established in Indonesia, Tokocrypto seeks to stamp its authority in this nation’s crypto space. Since 2018 to date, it has facilitated at least US$250 million in cryptocurrency assets.

Pang noted: “Being the first cryptocurrency exchange to be registered with Indonesian regulators to operate legally in the country is a huge milestone for Tokocrypto as it brings us one step closer to being the leading cryptocurrency exchange platform in Southeast Asia.”

Pang also added: “We will also continue our efforts in engaging the cryptocurrency community across Southeast Asia as the leading cryptocurrency exchange platform in the region. With the high potential of cryptocurrency in the region in terms of investments and transactions, we are confident that we are the pre-eminent gateway for traders and consumers alike to seize opportunities as they arise.”

Following the approval, Tokocrypto ascertained that it was committed to working closely with various government agencies across Southeast Asia for collaboration and licensing opportunities.

Image via Shutterstock

1 in 9 Indonesians hold Cryptocurrency, Hootsuite Report

Ever since Bitcoin came into existence in 2008, mass adoption of the technology has always seemed like a very distant reality, but a new report reveals that we are getting much closer than ever before.

According to a report shared by Hootsuite citing GlobalWebIndex, 11% of all Indonesians own some kind of cryptocurrency. The total population of Indonesia is just over 270 Million people which makes it the fourth most populous country on the planet.

If we do the math, it indeed turns out that 1 out of 9 citizens of Indonesia owns some sort of cryptocurrency. This indicates the massive level of mass adoption that the cryptocurrency is gaining in this region.

According to the Hootsuite report, Indonesia stands in the 6th position in terms of mass adoption of cryptocurrency following Philippines, Brazil, South Africa, Thailand, and Nigeria. Philipines has the highest percentage of the population owning cryptocurrency amongst any countries with 17% of the country’s population having its hands dipped in the crypto market.

The reason for such figures for Indonesia is being attributed to the devaluation of the national currency of Indonesia, i.e. Indonesia Rupee (IDR). IDR took one of the worst hits against USD since 1998 and since the start of the year 2020, the USD/IDR pair has surged by 18%.

Given the fact that internet penetration in Indonesia is 64%, the 11% figure for owning cryptocurrency is very impressive. However, not everyone seems to agree with this report.

The authenticity of the numbers coming up in the report is coming under question since it has been released. According to the Hootsuite report, 7% of the world’s population owns some kind of cryptocurrency. This means about 546 Million people around the world own some kind of cryptocurrency.

However, another report from Statista shows that there are only 45 Million blockchain wallet users in the world. Report from BitInfoCharts shows that more than 21 Million Bitcoin wallet holders have at least $1 in their accounts. Also, Brian Armstrong, CEO of Coinbase believes that there are almost 50 million crypto users in the world.

The numbers reported by Hootsuite and the earlier reports seem to contradict each other to some extent. But this doesn’t change the fact Indonesia is definitely one of the countries that is marching at the front for mass crypto adoption.

Image via Shutterstock

American Fugitive Wanted for $722 Million Crypto Scam Arrested in Indonesia for Child Sex Offenses

An American fraud fugitive wanted by the US Federal Bureau of Investigation (FBI) for a $722 million cryptocurrency scam has been nabbed in Jakarta, Indonesia, for child sex crimes. Russ Medlin has been on the wanted list of the FBI based on his involvement in a fraudulent Bitcoin scheme dubbed the Bitclub Network.

End of the road

It seems the proverbial forty days of a thief have dawned on Medlin as the US Justice Department found him answerable for a fake bitcoin mining that siphoned more than $700 million from investors in December 2019. Three of his accomplices were arrested, but he managed to flee from the long arm of the law.

US prosecutors allege that Medlin was the ringleader of the fraudulent Bitclub Network that emerged to be a high-tech Ponzi scheme. The scam was operational from April 2014 until December 2019, and unsuspecting investors were lured with earnings purported to be generated from Bitcoin mining.

Nevertheless, it is not clear whether the US authorities will ask for his extradition to face charges for the cryptocurrency scam.

Roma Hutajulu, Jakarta police special investigation director, noted:

We are still waiting for a request from the US Embassy.”

The cryptocurrency fraud headache

According to a report by Fortune Business Insights, the cryptocurrency market is expected to hit $1.75 billion by 2027 though it is becoming evident by the day that fraud in this sector is a considerable stumbling block.

However, the law is catching up with crypto fraudsters as witnessed in South Korea after a district court froze 15 cryptocurrency wallets belonging to Cho Ju-bin, the ringleader of the “Nth Rooms” scandal where underage girls were sexually exploited.

During the time of arrest, Medlin had $20,000, and if convicted under the Indonesian Child Protection Laws, he could be imprisoned for 15 years. Time will tell whether he will face the cryptocurrency fraudulent charges he is facing in the US.

Bank Indonesia Plans to Launch its Central Bank Digital Currency

According to a Reuters report on Tuesday, the Bank Indonesia (BI) is planning to launch its central state digital currency plan-the digital rupiah currency and is evaluating which platform to use in response to the increasingly prosperous cryptocurrency market.

Many central banks are now considering developing central bank digital currency (CBDC) to strengthen the pace of digital payment and achieve further modernization and upgrade of the financial system. These countries include South Korea, Thailand, the United States, China, Georgia, etc. Since then, the Central Bank of Indonesia has also successfully joined the central bank digital currency race.

Governor of Indonesia’s central bank Perry Warjiyo stated that the Indonesian rupiah is the only legal payment currency in Indonesia so far. Bank Indonesia will actively seek to strengthen the digital shield by the method of regulating cash and card transactions.

Since 2017, the Indonesian government has completely banned cryptocurrencies for payment purposes. However, it did not prohibit transactions among cryptocurrencies. BI plans to launch a digital rupiah currency as the only legal digital payment tool.

Warjiyo stated that:

“The rupiah was the only legally accepted currency for payment and BI will regulate the digital rupiah the same way it regulates banknotes and card-based transactions.”

According to the official documents, BI has not yet decided on the specific time for issuing the Indonesian rupiah digital currency. Still, the market believes that it will soon be prepared in this direction, aiming at the digital transformation to realize the Indonesian blueprint for payment in the 2025 System plan.

Indonesia has implemented its CBDC mainly to cope with the surge in digital banking. According to data from the BI, the frequency of transactions on digital banking platforms in April increased by 60.3% per year, indicating that more than 570 million transactions. The value increased by 46% to 3,114.1 trillion rupiahs (US$217.4 billion).

Despite Indonesia, other countries are also speeding up their development of CBDC.

Among them, the Bank of Korea was seeking a technology partner to help advance its pursuit of a Central Bank Digital Currency (CBDC) on Monday.

Meanwhile, the United States Federal Reserve aims to publish a discussion paper on CBDC this summer. Also, Jamaica’s Minister of Finance Nigel Clarke has announced that the country intends to launch its central bank digital currency (CBDC) in 2022.

Indonesia’s Pintu Crypto Exchange Raises $35M in Extended Series A, Led by Lightspeed Venture

Indonesia-based cryptocurrency exchange Pintu announced the company had completed an extended Series A funding round by raising $35 million, led by Lightspeed Venture Partners, citing multiple sources.

The company plans to expand its scale by accelerating talent acquisition. With the latest $35 million capital, Pintu expects to create strategic partnerships, undertake educational marketing campaigns, and deliver new products and asset classes, such as Pintu Earn, that enable users to earn interest via various crypto assets.

Multiple venture funds also join the campaign, including Alameda Ventures, Blockchain.com Ventures, Castle Island Ventures, Coinbase Ventures, Intudo Ventures, Pantera Capital.

Jeth Soetoyo, co-founder and CEO of Pintu, said he would facilitate greater financial inclusion for Indonesians from all walks of life, with the support from the investors:

“As the fourth most populous country in the world and with only 1-2% of Indonesians exposed to cryptocurrencies, there is immense opportunity for retail investors to gain access to diverse and dynamic investment opportunities through Pintu’s unique cryptoasset commercial offerings.”

Pintu is a registered crypto exchange as a licensed cryptocurrency brokerage under the Indonesian Commodity Futures Trading Regulatory Agency, which allows the company to serve retail investors. Currently, the brokerage offers 16 cryptocurrencies, including NFT tokens.

This round financing extends from a $6 million Series A raised in May, led by Pantera, Intudo and Coinbase Ventures, according to online media TechCrunch. As of June 2021, more than 6.6 million crypto investors in Indonesia, roughly triple that of the country’s 2.2 million public equity investors, according to Pintu.

Indonesia is home to over 273.5 million population in this fourth-largest nation. The authority has been eyeing a plan to tax profits on crypto trading in response to increasing popularity.

Image source: pintu facebook page

Indonesia Set to Impose Income Tax on Crypto Assets from May

Indonesia, the largest economy in Southeast Asia, announced plans to charge value-added tax (VAT) on crypto-asset transactions as well as an income tax on capital gains from such investments at 0.1% each, beginning May 1st.

A tax official made the announcement last Friday amid a boom in crypto asset trading in the country. In a statement, Hestu Yoga Saksama, the tax office spokesperson, said: “Crypto-assets will be subject to VAT because they are a commodity as defined by the trade ministry. They are not a currency. So, we will impose income tax and VAT.”

Saksama further disclosed that the government is still working on implementing regulations for taxes associated with crypto assets.

The VAT rate on cryptocurrencies is well below the 11% imposed on most goods and services in Indonesia, while the income tax on capital gains, at 0.1% of gross transaction value, matches that on shares.

The official stated that a wide-ranging tax law that the government passed last year was the legal basis for taxes on crypto assets. He mentioned that the law aims to enhance revenue collection, which was hit by the economic and social disruption caused by the Covid-19 pandemic.

Cryptos on the Rise in the Country

In January, Indonesia’s Financial Services Authority (OJK), the government agency in charge of regulating the financial sector, warned that financial companies are not allowed to provide and facilitate sales of cryptocurrencies amid a boom in crypto trading in the country.

The OJK banned financial service institutions from using, marketing, and facilitating crypto trading. The regulator also warned that the value of cryptocurrencies often fluctuates and that individuals purchasing digital assets should fully understand the risks.

Indonesia allows sales of cryptocurrencies in the commodities exchange and trading, which is supervised by the Commodity and Futures Trading Regulatory Agency (CoFTRA) under the Ministry of Trade, not by the OJK.

Currently, the ministry is facilitating the setup of a separate bourse for digital assets, known as the Digital Futures Exchange, within this year.

Interest in digital assets has surged in Indonesia during the COVID-19 pandemic, with the number of crypto holders rising to 11 million by the end of last year.

Last year, the total crypto transactions in commodity futures markets climbed to 859.4 trillion rupiahs ($59.8 billion), up more than 10 times from the transaction value witnessed in 2020, according to data from the Commodity Futures Trading Regulatory Agency.

The government allows Indonesians to trade crypto assets as a commodity but not to use them as a means of payment.

Indonesia Officially Imposes 0.1% Tax and VAT on Crypto Income and Purchases

According to the Times of India, Hestu Yoga Saksama, director of tax regulations at the Ministry of Finance, has confirmed that the government has decided to impose a 0.1% tax charge on incomes emanating from the trade of digital currencies.

Indonesia, Southeast Asia’s largest economy, announced plans to tax capital gains from crypto investments by 0.1 percent from May 1. Value Added Tax (VAT) on cryptocurrency purchases will be levied at the same rate.

Hestu Yoga Saksama stated that the central bank of Bank Indonesia and the Ministry of Commerce see cryptocurrencies as a commodity, not payment method. Therefore, has decided to charge income tax and value-added tax.

The VAT rate for cryptocurrencies is well below the 11% Indonesia levies on most goods and services, while the capital gains tax rate is 0.1% of the total transaction value, matching stocks. Currently, the Indonesian government allows crypto-assets to be traded as commodities but prohibits their use as a means of payment.

Indonesia allows the sale of cryptocurrencies on commodity exchanges, which are regulated by the Commodities and Futures Trading Regulatory Agency (CoFTRA) under the Ministry of Trade.

Interest in digital assets has surged in Indonesia during the COVID-19 pandemic, with the number of cryptocurrency holders rising to 11 million by the end of last year.