Traders in Indonesia have criticized a new regulation that requires $70 million in capital to trade in crypto futures, as per reports from The Jakarta Post, February 14, 2019.
While the growth of the blockchain and cryptocurrency industry has been impressive, it certainly has not been evenly spread around the world. Some nations in Europe, as well as the famous ‘Blockchain Island’ of Malta, have put very crypto-friendly and well-defined laws in place, other jurisdictions are trailing behing and are in the process of adding new laws.
However, the addition of a new law regarding the blockchain and cryptocurrency industry doesn’t always signal growth, as evidenced by the new law in Indonesia that is speaking outcry from traders.
It was reported on February 14, 2019, that the Indonesian Trade Ministry’s Futures Exchange Supervisory Board (Bappebti) has issued a new regulation regarding the physical markets for crypto assets in futures exchanges.
Up in Arms
On the surface, the law appears to cover the basics such as consumer protection and good governance practices requirements for traders. The part of the new regulation that has traders riled up is Article 24, Paragraph 3, which states that traders of cryptocurrency futures are required to have $7.13 million transferred to their accounts, of which 80 percent must be kept as a deposit.
To make matters worse, to even get approved by the government to be a facilitator of customers’ crypto assets, traders are required to transfer roughly $70 million in capital and keep 80 percent of this in their accounts. In contrast, the amount needed to begin trading in traditional assets is only $178,000.
As expected, this has caused uproar within the crypto community as this law is seen as unnecessarily demanding no to mention being conducive to stifling industry growth.
New Laws, Good Law
In all commercial sectors of a nation, some form of government oversight is needed and the industry has been able to grow thanks to Laws such as Ohio’s acceptance of bitcoin for tax payment and governments making use of blockchain for various purposes.
However, not every law is beneficial and it is now obvious that a cryptocurrency or ICO ban isn’t the only way the industry can be stifled. Laws such as this one, while technically allowing futures trading, creates such stringent rules surrounding it that it might as well not exist at all.