Indonesia plans to improve the security of cryptocurrency investments in the country.

The Indonesian Financial Services Authority (FSO) will oversee the regulationsupervision and control of crypto investments to enhance investor protection, the finance minister of the Southeast Asian country said on Thursday.

The cryptocurrency sector in Indonesia is currently under the joint supervision of the Ministry of Commerce and the Commodity Futures Trading Regulatory Agency.

Finance Minister Sri Mulyani Indrawati presented the new plan to improve security as part of the financial sector legislation being debated in parliament.

Cryptocurrency in the largest economy in Southeast Asia has seen a boom in cryptocurrency investments, but the use of such assets as a means of payment is illegal in Indonesia. However, cryptocurrency transactions for investment purposes are allowed in the commodity market.

According to Sri Mulyani, in June there were 15.1 million cryptocurrency investors in the country. The number is a massive increase from just 4 million in 2020.

Sri Mulyani told a parliamentary hearing that “we need to build an investor protection and supervision mechanism that is quite strong and reliable, especially for investment instruments that are high risk.”

He added that the new bill would empower OJK to regulate and supervise “digital asset activities, including crypto assets and financial sector technological innovation.”

Indonesia also announced at the end of September about new rules for crypto asset exchanges.

The South Asian country’s commerce ministry plans to issue new rules to govern cryptocurrency exchanges that will require two-thirds of the board of directors and commissioners to be Indonesian citizens and live in Indonesia, a deputy minister said on Tuesday.

This change came about due to the financial issues facing cryptocurrency exchange Zipmex as it has currently prevented users from withdrawing funds.

“We don’t want to give permits (to exchanges) carelessly, only to those that meet the requirements and are credible,” Deputy Commerce Minister Jerry Sambuaga told reporters after a parliamentary hearing.

Sambuaga added that the ministry’s Commodity Futures Trading Regulatory Agency (Bappebti) would issue the new rule soon.

However, no time frame has been provided.

According to a document issued by the ministry, the new rule will also require an exchange to use a third party to store customer funds and will prohibit exchanges from reinvesting stored crypto assets.

Didid Noordiatmoko, Bappebti’s interim boss, told the parliamentary hearing that ensuring two-thirds of the board were Indonesians based in the country “could prevent senior management from fleeing when a problem arises at the exchange.”

The country’s performance in terms of crypto transaction taxes has also improved.

Since the implementation of crypto and fintech transaction taxes in May, Indonesia has amassed nearly $6.8 million, according to the nation’s special tax compliance staffer Yon Arsal.

The Indonesian Ministry of Finance imposed a 0.1% value-added tax (VAT) on purchases of crypto assets on May 1 this year. while youhe Indonesian administration decided to tax crypto transactions based on the growing popularity among local investors.

Furthermore, interest in cryptocurrencies on Indonesian soil has skyrocketed since the start of the COVID-19 pandemic. The number of cryptocurrency owners stood at 11 million in 2021.

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