Indonesia’s crypto-community has been building organically for years, and is widely expected to have a major impact on the country’s future as well as its standing in the world
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As China and the United States trade interminable barbs over tech, trade, policy, and more, Southeast Asia continues to be something of an enigma: on the one hand, it’s a battleground in the high-stakes tussle between the two global powers; on the other, there are machinations at work for the nations of Southeast Asia to become a force in their own right. Unified by the Association of Southeast Asian Nations (ASEAN), the ten-member intergovernmental organization is vying to set its own global agenda for growth and prosperity, rather than being forced to choose sides in Chinese-American bilateralism.
In no small way, Indonesia is making a push to assert itself as the leader among the ASEAN countries. With both the largest population and the largest GDP in the group, Indonesia is poised to set the tone for the region — especially with President Joko Widodo (or Jokowi, as he is known) having just won five more years leading the government.
While many Indonesians have lamented some of the more backwards-looking actions taken by Jokowi in his first term, the president (once commonly referred to as “Indonesia’s Obama”) appears to be well aware that there is no regional leadership among ASEAN countries — and limited agency on the global stage — in the absence of innovation. And while there are many ‘horses of innovation’ to bet on at this particular moment of history, Indonesia is hitching its wagon to blockchain.
Bappebti Thaws Its Cool Stance To the Blockchain
To be sure, Indonesia only recently changed its tune regarding cryptos. Amid concerns of rampant fraud and perhaps even seeing financial order being upended, the Jokowi-led government initially turned its back on the blockchain when it issued an outright ban on cryptocurrencies that took effect on January 1, 2018 in the wake of the crypto mania of 2017.
While the use of bitcoin in transactions for goods and services is still prohibited, the country has signaled that it’s ready to dip its toes in innovating through the blockchain. Back in February, the Indonesian government announced that it was creating legal frameworks through which cryptos and digital asset futures will operate. This came just a few days after the Commodity Futures Trading Regulatory Agency (or Bappebti) announced that bitcoin and other cryptocurrencies would be classified as trading commodities — not unlike copper or tin (to which Indonesia is home to the world’s largest market).
These landmark announcements give legitimacy to the crypto exchanges that have already been operating in Indonesia. Perhaps even more significantly, Indonesia’s newfound tolerance and curiosity of blockchain creates momentum for the technology to be piloted for a range of applications — and the government is not biding its time to put the technology to work.
Just months after the announcement was made, Indonesia used blockchain verification for nearly 13 per cent of the 193 million votes that were cast in Jowoki’s reelection bid. A few weeks later, the government announced a multimillion-dollar partnership with Singapore-based blockchain firm PLMP Fintech to improve the logistics industry using blockchain technology. In the first phase of the collaboration, protocols to standardize communication using the blockchain among commercial entities trading agricultural commodities will be established. It will enable commerce to happen faster, more securely, and more efficiently.
Inevitably, as the partnership strengthens, even more commercial applications will be sussed out. Just a few months into changing its stance towards what some argue to be one of the most disruptive technologies the world has ever seen, the future looks bright when it comes to government-driven blockchain initiatives in Indonesia.
The Rise of Blockchain in Private Enterprise
Meanwhile, Indonesia’s well-developed private blockchain sector is riding the new energy that has emerged through the paths created by the Indonesian government. While crypto exchanges like Coinone and Lunos have been popular in the country for years, Cointelegraph Japan recently reported that Indonesia is the fourth largest source of traffic on crypto exchanges of every country in the world.
Indonesia’s renewed guidance towards cryptocurrencies is creating confidence for key figures to postulate the ways the private sector can lead the way in solving problems in Indonesia using the blockchain. Pang Xue Kai, co-founder of the Indonesian crypto exchange Tokocrypto recently commented that the success of libra, the cryptocurrency Facebook just introduced to the world, could very well depend on its ability to solve debilitating problems in a country like Indonesia on a local level.
Indonesia also has the fourth-most Facebook users of any country in the world, and the spread of misinformation as well as the manipulation of user data is a major problem. It’s so bad that it’s been described as a “battleground,” with a measurable impact on Indonesian politics on a local and national level. Commenters believe it behooves Facebook make it a priority to leverage libra to address issues that undermine democracy and compromise the privacy of Indonesian citizens.
Establishing a Blockchain Startup Scene in Indonesia
Elsewhere in Indonesia’s private sector, organizations like the Blockchain Innovation Center are leading the way in creating an environment in which blockchain startups can launch — and eventually scale. The BIC is the largest blockchain innovation center in all of Indonesia with extensive, well-established partnerships in the global blockchain community. It provides consulting, promotion, and even work space to Indonesian companies trying to make an impact on the world using the blockchain. The Jakarta-based entity has its own exchange and also offers education to the public on blockchain technology and digital assets. In effect, the BIC has succeeded in fostering a thriving blockchain community in the largest archipelago nation in the world.
With such a supportive environment being developed by both new and well-established non-governmental entities, it’s no wonder that so many promising startup companies have emerged from Indonesia, such as Indoda – a cryptocurrency exchange, with more than 1 million active users, and Triv, a website that allows users to buy things on the internet, as well as send and request money to other users.
But many would still say that the blockchain companies with the greatest impact on the development and progress of the technology in Indonesia are the ones creating community and conduits of information. In addition to BIC, Blocktech Indonesia and the Indonesian Blockchain Network are two of the most impressive private organizations in the country in this regard. Blocktech Indonesia’s mission is simple: to grow blockchain companies in Indonesia. With both significant funding resources as well as in-house developers, Blocktech Indonesia is a force in the Indonesian blockchain scene. The Indonesian Blockchain Network, meanwhile, is an advocacy group that, among many things, raises awareness about the blockchain through workshops and online content.
All things considered, it’s hard to find many countries in the world with a more robust blockchain and cryptocurrency environment than Indonesia. It’s truly a grassroots community that has been building organically for years that now will have a major impact on the country’s future as well as its standing in the world. With new votes of confidence from perhaps the community’s most important partner — the Indonesian government — it’s not unreasonable to anticipate Indonesia’s ascension on the global stage on the strength of the blockchain.