Indonesia Crypto Assets Tax Reform: $39 Billion Market Faces New Tax Rates, Which Exchange Will Prevail?

The cryptocurrency market in Indonesia is thriving. In 2024, the trading volume of cryptocurrency doubled, reaching 650 trillion Indonesian Rupiah (39.67 billion USD), with the number of cryptocurrency users exceeding 20 million, surpassing the number of investors in the country's stock market. Against this backdrop, Indonesia will significantly increase the tax on cryptocurrency transactions starting August 1, targeting this market with a trading volume exceeding 39 billion USD. This Southeast Asian country will more than double the tax on domestic cryptocurrency exchanges and impose higher tax rates on foreign platforms. This initiative aims to provide legal certainty for Crypto Assets trading and adapt to the development of Crypto Assets trading.

Tax Rates Rise Across the Board: Differentiated Taxation for Domestic and Foreign Exchanges

According to the new framework announced by the Indonesian Ministry of Finance, sellers using domestic cryptocurrency exchanges will pay a tax of 0.21% on each transaction, up from the previous 0.1%. For overseas platforms, the increase is even larger, with sellers now required to pay a tax of 1%, while the previous rate was 0.2%.

The government has canceled the value-added tax (VAT) for Crypto Assets buyers, who previously had to pay 0.11% to 0.22% VAT. However, the VAT for Crypto Assets miners will double, increasing from 1.1% to 2.2%. Starting in 2026, miners will also lose the special income tax rate of 0.1% and will instead pay the standard personal or corporate income tax.

Finance Minister Sri Mulyani Indrawati stated that these changes aim to "provide legal certainty for Crypto Assets exchange and adapt to the development of Crypto Assets exchange."

Massive market growth drives policy changes

The cryptocurrency boom in Indonesia has attracted the attention of regulators. The country is in a leading position globally in terms of cryptocurrency adoption. Monthly trading volume has surged dramatically, with cryptocurrency trading reaching 49.57 trillion Indonesian Rupiah (approximately 3.02 billion USD) in May 2025.

This growth reflects Indonesia's young and tech-savvy demographic. About 60% of Crypto Assets traders are between the ages of 18 and 30, and they fully utilize mobile-first trading applications. With smartphone penetration in Indonesia nearing 91%, Crypto Assets platforms have garnered enthusiastic users across the country. Popular trading assets include Tether (USDT), Bitcoin (BTC), Dogecoin (DOGE), and Ethereum (ETH). The number of exchange users has surged, and the number of users in the country's Crypto Assets exchanges has now surpassed that of traditional stock market investors.

From Ban to Regulation: Indonesia's Crypto Assets Journey

The relationship between Indonesia and digital currency has undergone significant changes. In 2017, the Central Bank of Indonesia prohibited the use of Crypto Assets as a means of payment due to concerns over safety and volatility. In 2018, the situation changed. At that time, the U.S. Commodity Futures Trading Commission (Bappebti) classified Crypto Assets as tradable commodities. This allowed for legal trading on futures exchanges, but strict rules had to be followed to protect investors.

By 2019, Indonesia had launched comprehensive regulations for Crypto Assets exchanges. The government requires exchanges to retain five years of transaction records, comply with anti-money laundering rules, and host their servers domestically. In July 2023, with the establishment of the world's first government-supported Crypto Assets exchange – the Commodity Futures Exchange (CFX), the industry reached a milestone. This government-operated platform aims to enhance transparency and better protect investors.

On January 10, 2025, significant changes occurred as the supervisory authority was transferred from Bappebti to the Financial Services Authority (OJK). This move reclassified crypto assets from commodities to digital financial assets, bringing them under the same regulatory framework as traditional financial securities. Under the new system, all existing licenses and approvals issued by Bappebti remain valid. However, cryptocurrency companies must fully comply with OJK's new requirements by July 2025.

Industry Response and Strategic Impact

The major Indonesian exchange Tokocrypto, supported by a well-known Crypto Assets service provider, welcomes regulatory changes but requests at least a one-month grace period for businesses to adjust. The company emphasizes that strengthening regulation of foreign platform trading is crucial.

The tax structure provides clear incentives for traders to choose domestic exchanges over foreign ones. The tax rate for domestic platforms is 0.21%, while the tax rate for foreign exchanges is 1%. The government is promoting the shift of encryption activities to regulated local platforms. This practice reflects Indonesia's broader strategy of supporting domestic enterprises while curbing unregulated foreign competitors. In 2022, the Indonesian government blocked several large foreign crypto assets platforms, including many major foreign crypto assets platforms, due to the lack of proper licenses.

What does the future mean for Crypto Assets?

Indonesia's tax increase shows that the government realizes that Crypto Assets have moved from niche investments to mainstream applications. The enormous revenue potential of the $39 billion market makes Crypto Assets taxation an important policy focus. The differential tax rates between domestic and foreign exchanges reflect Indonesia's desire to maintain regulatory control while developing local Crypto Assets infrastructure. By improving the cost-effectiveness of domestic platforms, the government can better monitor trading activities and protect consumers.

Despite the increase in tax rates, industry experts expect the Crypto Assets market to continue to grow. The younger demographic driving the popularity of Crypto Assets shows no signs of slowing down, and the increased regulatory transparency may actually attract more institutional investors who previously avoided the industry due to uncertainty.

Conclusion:

Indonesia's adjustment of cryptocurrency taxation is a strategic measure taken to achieve regulatory certainty and protect investors in the context of the rapid development of the digital asset market. This policy will not only have a profound impact on Indonesia's domestic cryptocurrency market but also provides a reference for other countries in cryptocurrency regulation.