Bitcoin traders in Indonesia are protesting what they call excessive capital requirements imposed by the government on cryptocurrency futures trading. The aggrieved brokers say the restrictive law is preventing anyone from participating in the market.
Stifling the Bitcoin Futures Trading Arena
According to The Jakarta Post, the Futures Exchange Supervisory Board (Bappebti) of the Indonesian Trade Ministry issued regulations to govern cryptocurrency futures trading in the country. Among these laws are minimum capital requirements for cryptocurrency futures traders and brokers.
Article 8, paragraph 1 of the regulations stipulate that crypto futures brokerage firms require a minimum paid-up capital of 1 trillion rupiah ($71.7 million). Also, article 24, paragraph 3 of the same set of regulations require Bitcoin futures traders to hold a minimum of 100 billion rupiah ($7.17 million), out of which the law mandates a minimum deposit of 80 billion ruppiah ($5.73 million).
Stakeholders in the industry say the transferred capital requirements far exceed those stipulated for futures trading in mainstream asset classes.
Speaking to Reuters, Oscar Darmawan, the CEO of Indodax, a cryptocurrency exchange platform compared the capital requirements to that of mainstream futures contracts which stands at 2.5 billion rupiah ($179,000).
Back in mid-2018, Bitcoinist reported that Bappebti was legitimizing virtual currencies by classifying them as commodities. While the need to offer consumer protection is legitimate, a 40,000 percent dichotomy in capital requirement for cryptos and mainstream commodities futures trading is seen by industry commentators as excessive.
According to Darmawan, these regulations are counterproductive to the growth of the virtual currency industry. Reports indicate there haven’t been any transactions in the Indonesian cryptocurrency futures trading market to date.
Weekly Bitcoin Trading Volume Reaches New Heights
Meanwhile, BTC trading volume in Indonesia is currently on the rise.
Data from Coin Dance shows that Indonesians traded 102 BTC via Localbitcoins for the week ending February 9, 2019. This figure represents the country’s largest weekly trading volume beating the previous record of 43 BTC set in early October 2016.
In terms of the rupiah, the new weekly BTC trading volume stands at 4.5 billion rupiah. The country’s apex bank banned the use of Bitcoin for payments back in December 2017, but trading cryptos isn’t outlawed.
Do you think the minimum capital requirement imposed on Indonesian BTC futures brokerages is exorbitant? Let us know your thoughts in the comments below.
Image courtesy of coin.dance, Shutterstock
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