The Financial Service Authority of Indonesia has warned numerous financial firms about the limitations of cryptocurrencies as the digital assets trading industry keeps on growing in Southeast Asia's largest economy, per Reuters.
Regulators have prohibited financial institutions from almost all operations with cryptocurrencies, including using, marketing and facilitating digital assets trading, according to the official statement on Instagram.
The reason behind the further regulation of operations with digital assets is the volatile nature of cryptocurrencies. The regulator's main goal is to reach out to amateur investors that could potentially underestimate risks tied to investments in cryptocurrency.
The regulator has also warned citizens to beware of allegations of Ponzi scheme scams in crypto.
Previously, the central banks of Thailand and Singapore released similar warnings for their citizens.
Trading of cryptocurrencies and digital assets in Indonesia was on the rise since 2021. The transactional volume on the country's market has reached almost $60 billion, or 859 rupiahs. Back in 2020, the trading volume for the digital assets market in the country in 2020 was staying at approximately 60 trillion rupiahs, per ministry data.
Officially, Indonesian financial regulators allow sales of cryptocurrency assets on a commodities exchange. The process of exchange is supervised by the trade ministry and the Commodity Futures Trading Regulatory Agency.
Further control and regulation are expected to appear on the market after the creation of the Digital Futures Exchange that is expected to be launched in the first quarter of the year. The initiation of a separate exchange for digital assets will allow the regulator to more effectively oversee the industry.