Legal Literacy - The present time is referred to as the "post-information technology era," and various new methods are emerging, including the processing, use, and dissemination of information. Currently, information is not only used as a source of knowledge but also as a commodity.[1] As information technology develops, alternative instruments for making payments also develop, in addition to using cash and demand deposits, both domestically and internationally.
In 2008, Satoshi Nakamoto published a book entitled Bitcoin - A Peer to Peer Electronic Cash System”. Then in 2010, cryptocurrencies began to emerge in the world.[2] Since that year, the price of currency Cryptocurrency (hereinafter referred to as crypto) has also experienced a significant increase. This is what then makes many people mine cryptocurrencies that are circulating in limited quantities. Etymologically Cryptocurrency consists of 2 words, namely crypto which means secret and currency which means money.[3]
According to Rosic, crypto is an internet-based exchange tool for conducting financial transactions. Crypto utilizes decentralized blockchain technology; theoretically, crypto is immune to control and interference from banks and governments. Furthermore, according to Hasemi et al., crypto is an online digital payment system using Society for Worldwide Interbank Financial Telecommunication (SWIFT) or Single Euro Payments Area (SEPA) in the European Union region. In its development, crypto is not only used for business purposes but also for remittances and micro-payments.[4]
From the above definitions, it can be understood that crypto is part of a new type of financial instrument that has emerged and developed in this century as an implication of advances in information technology. This virtual currency can be used for electronic transactions. In addition, its owners also use crypto for investment and trading in a business context. These activities are carried out online without involving intermediaries such as banks. Transactions are carried out instantly without limits, quickly, and easily.
In the context of Indonesia, quoting research conducted by Center of Economic and Law Studies (CELIOS), the three main investment products favored by Indonesian society are mutual funds (29.8%), stocks (21.7%), and crypto assets (21.1%) with an average value of 500 thousand - 1 million rupiah. In line with these data, according to the Commodity Futures Trading Regulatory Agency (Bappebti), throughout 2022, the value of crypto asset transactions reached Rp306.39 trillion.[5] Looking at these data, there has been a trend or shift in business transactions towards crypto assets by Indonesian society.
Judging from the investment potentials above, the State of Indonesia has created steps that encourage the investment world climate, including in crypto assets.[6] The Ministry of Trade of the Republic of Indonesia has regulated crypto assets through Regulation Number 99 of 2018 concerning General Policies for the Implementation of Crypto Asset Futures Trading. Furthermore, in a coordination meeting as per the Coordinating Minister for Economic Affairs' letter Number S-302/M.EKON/09/2018 dated September 24, 2018, regarding Follow-up to the Implementation of Coordination Meeting on Crypto Asset Regulation as a Commodity Traded on the Futures Exchange.
The meeting concluded that digital commodities or crypto commodities from the blockchain system can be categorized as rights or interests, thus falling into the commodity category in Law No. 10 of 2011 concerning Commodity Futures Trading. Article 1 number (2) states that a Commodity is all goods, services, rights and other interests and any derivatives of commodities that can be traded and become the subject of futures contracts, sharia derivative contracts, and/or other derivative contracts.
One of the advantages of crypto assets is fast transfers with very large investment profits.[7] The existence of crypto assets is a demand from the public who want easy and fast transactions without the intervention of third parties, be it government agencies or financial institutions. Regardless of the benefits gained when using crypto assets, there are several risks that follow because the crypto currency usage system is fluctuating, which has an impact on the very high fluctuations in the price value of crypto assets.[8]
By using crypto as an investment asset, it is hoped that users will obtain legal legality that is more easily aligned to ensure the stability of national investment and the sustainability of its existence. Thus, based on the description above, the author is interested in knowing the legality of assets cryptocurrency (crypto) that can be traded which has recently become a trend in the investment world in Indonesia.
[1] Yazrul Anuar, Raju Moh Hazmi and Jasman Nazar, “Tiktok Shop Vs E-Commerce Vs Negara: Mencari Titik Keseimbangan Dalam Bingkai Ekonomi Konstitusional,” Law Jurnal: Jurnal Ilmiah Penelitian, 4.1 (2023), 2.
[2] Budi Raharjo, Uang Masa Depan : Blockchain, Bitcoin, Cryptocurrencies (Yayasan Prima Agus Teknik, 2022).
[3] Nana Suryana & Laksmie Wulan Dhidan Akbar Syafdinan, “Perlindungan Hukum Terhadap Korban Crypto Dihubungakan Dengan Undang-Undang Nomor 8 Tahun 1999 Tentang Perlindungan Konsumen,” Panorama Hukum, 8.2 (2023), 141.
[4] K Hashemi Joo, M., Nishikawa, Y, & Dandapani, “Cryptocurrency A Successful Application of Blockchain Technology,” Managerial Finance, 4.6 (2020), 715 <https://doi.org/https://doi.org/10.1108/MF-09-20180451>.
[5] Webinar BLK, “Perlindungan Konsumen Aset Kripto,” 2023.
[6] BAPPEBTI, Badan pengawas Perdagangan Berjangka Komoditi, dan Commodity Futures Trading Regulatory Agency CoFTRA, Crypto Asset (Crypto Asset) (Ministry of Trade of the Republic of Indonesia, 2020) <https://bappebti.go.id/resources/docs/brosur_leaflet_2001_01_09_o26ulbsq.pdf>.
[7] Muhammad Adisurya Pratama, “Crypto Investment: Between Profit, Loss and Depression,” Bank Indonesia, 2022 <Https://Bi.Prosa.Ai/Id/Bi-Institute/BI-Epsilon/Pages/Investasi-Kripto-Antara-Untung,-Buntung-Dan-Depresi.Aspx> [Accessed October 3, 2024].
[8] Anak Agung Ngurah & Ni Ketut Supasti Dharmawan, “Legality of Crypto Asset Investment in Indonesia as a Digital Commodity and Means of Payment,” Jurnal Kertha Wicara, 11.1 (2021), 65 <https://doi.org/KW.2021.v11.i01.p07>.
Legality of Crypto Asset Investment
In the business world, we often see or hear the term investment. Simply put, investment is the activity of investing capital to be included in productive assets for a certain period of time.[1] Authentically, the definition of investment can be seen in Law Number 25 of 2007 concerning Investment. Article 1 paragraph (1) explains that investment is any form of activity of investing capital, both by domestic investors and foreign investors to conduct business in the territory of the Republic of Indonesia.
Thus, investment can be understood as the process of distributing existing funds with the hope of obtaining additional or certain profits on the funds invested in the world of trade. [2] The grouping of investment categories is basically divided into 2 categories, namely, first, direct investment and second, indirect investment. Meanwhile, the grouping of investments based on their type includes investment groups according to their assets.
In this study topic, one of the assets that is currently widely discussed is crypto asset investment traded on commodity futures exchanges. Article 1 paragraph (1) of Law Number 10 of 2011 concerning Commodity Futures Trading. Defines commodity futures trading as anything related to the buying and selling of commodities with margin withdrawals and subsequent settlement based on futures contracts, sharia derivative contracts, and/or other derivative contracts. Furthermore, it is regulated in the Minister of Trade Regulation Number 99 of 2018. Article 1 paragraph (1) Crypto Assets (Crypto Assets) are designated as Commodities that can be used as the subject of futures contracts traded on futures exchanges.
Then it was reinforced through BAPPEBTI regulation Number 5 of 2019. Article 1 paragraph (7) which reads crypto assets are intangible commodities in the form of digital assets, using cryptography, peer-to-peer networks, and distributed ledgers, to regulate the creation of new units, verify transactions, and secure transactions without intervention from other parties. The definition of a futures exchange itself can be seen through BAPEBBTI regulation Number 2 of 2019 Article 1 paragraph (3) a futures exchange is a business entity that organizes and provides systems and/or facilities for buying and selling commodities based on futures contracts, sharia derivative contracts, and/or other derivative contracts.
Thus, referring to these legal provisions, it can be concluded that crypto assets can be used as a means of commodity investment traded on futures exchanges in Indonesia because they have a clear legal basis or framework.
[1] Nurul Huda & Risman Hambali, “Risk and Rate of Return on Cryptocurrency Investment,” Jurnal Manajemen dan Bisnis (Performa), 17.1 (2020), 80 <https://doi.org/10.29313/performa.v17i1.7236>.
[2] Made Adnyana, Investment and Portfolio Management (Jakarta: Lembaga Penerbitan Universitas Nasional (LPU-UNAS), 2020).
Crypto Assets That Can Be Traded in Indonesia
Crypto assets as an invention have provided new ideas in the world of payments that are used easily with the same value as money and are digital. Due to their sophistication, the use of crypto assets is not only a means of exchanging value but also as an investment medium. There are currently many diverse crypto assets, each with different characteristics, working methods, objectives, and uses.[1]
Due to the large number of crypto assets in the world, BAPPEBTI is sorting and selecting so that not all crypto assets can be traded on the Indonesian futures exchange. According to BAPPEBTI Regulation Number 13 of 2022 concerning Amendments to Bappebti Regulation Number 8 of 2021 concerning Guidelines for the Implementation of Physical Crypto Asset Trading in Futures Exchanges.
Crypto assets can be traded if they meet at least the following requirements:
- Based on distributed ledger technology;
- In the form of utility crypto assets (utility crypto) or Crypto Backed Assets;
- Have had an assessment using the Analytical Hierarchy Process (AHP) method established by Bappebti
Assessment results with Analytical Hierarchy Process (AHP) must consider the following provisions:
- Market capitalization value (market cap) of Crypto Assets (coin market cap);
- included in major Crypto Asset exchange transactions in the world;
- has economic benefits, such as taxation, growing the digital economy, informatics industry and the competence of experts in the field of informatics (digital talent); and
- its risk assessment has been carried out, including the risk of money laundering and terrorism financing as well as the proliferation of weapons of mass destruction
The results of the above requirements and selection criteria can be seen in BAPPEBTI Regulation Number 4 of 2023 concerning the Determination of the List of Crypto Assets Traded in the Physical Market of Crypto Assets. From these results, BAPPEBTI has determined that the number of crypto assets allowed on the Indonesian trading exchange is currently 501.
Crypto Assets in futures trading are still in the developing stage, so they are rarely known by the general public compared to other investment instruments such as stocks or the capital market, which existed beforehand. Crypto is volatile, meaning it has the potential to generate high profits in a short time and, conversely, can present the risk of losing capital in a short time as well.[2]
To reduce the risk of loss due to price fluctuations, it can be done with management facilities contained in futures trading.[3] Protection against this risk is carried out by transferring the risk and warning investors from the start in order to obtain profits from fluctuating price movements in the crypto market.
This is the reason why the Commodity Futures Trading Regulatory Agency and the Ministry of Trade place the category of crypto asset transactions as a futures exchange, in order to avoid price fluctuations that can change instantly. Referring to these data, it can be seen that the number of Crypto assets in Indonesia currently amounts to 501 and can be traded through electronic technology intermediaries and the digital world.
[1] Indodax, “Introduction to Crypto Assets” <https://indodax.com/academy/perkenalan-aset-kripto/#:~:text=Aset kripto adalah suatu bentuk,berbagai exchange crypto seperti INDODAX.> [accessed March 10, 2024].
[2] Fransiskus Liotama, “Legal Certainty of Commodity Futures Trading Investment Based on Law Number 10 of 2011 concerning Commodity Futures Trading,” Jurnal Surya Kencana Satu : Dynamics of Legal Issues and Justice, 9.1 (2018), 55 <https://doi.org/10.32493/jdmhkdmhk.v9i1.1176>.
[3] Jamaludin Nurasyikin, “Religion and Individual Investment Choice Decision: The Case of Malaysia,” International Journal of Business and Social Science, 4.1 (2013), 108 <https://doi.org/10.30845/ijbss>.
Conclusion
Based on Indonesian laws and regulations, crypto assets are designated as a commodity category that can be the subject of investment, with further provisions to be regulated by the authorized institution, namely the Commodity Futures Trading Regulatory Agency. Regulation of the Commodity Futures Trading Regulatory Agency Number 4 of 2023 concerning the Determination of the List of Crypto Assets Traded in the Physical Crypto Asset Market. Referring to these regulations, it can be seen that there are currently 501 types of crypto assets in Indonesia that can be traded through electronic technology intermediaries and the digital world.
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